10th Aug 2018 14:47
LONDON (Alliance News) - The National Institute of Economic & Social Research on Friday said UK economic growth is now "back on track", with the think tank seeing a 0.5% expansion in gross domestic product in the third quarter.
The latest data from the Office of National Statistics has confirmed the UK recovered from a soft first quarter and is now growing at a pace "at or slightly above potential", the NISER said.
The ONS earlier on Friday said GDP rose 0.4% sequentially in the second quarter - accelerating from a 0.2% rise in the first quarter - up 1.3% on an annual basis, compared to 1.2% in the first three months of the year.
The dominant services output expanded 0.5% and construction logged a quarterly growth of 0.9%. These increases helped to offset a 0.8% fall in production.
"The outturn was in line with the monthly GDP forecast that we published last month for the same period and is close to our estimate of potential growth rate. Building on the official data, our monthly GDP Tracker suggests that growth is set to nudge higher to 0.5% in the third quarter," the think tank said.
Recent survey evidence suggests manufacturing and construction are covering after a "particularly weak" start to the year, with the services sector to maintain a similar rate of growth in the third quarter.
Amit Kara, head of UK macroeconomic forecasting at NIESR, said: "Looking ahead, there is some evidence to suggest that services sector output has stabilised while the relatively small construction sector continues to gather momentum."