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UK rate of economic growth slows, but still strong

Xinhua, September 10, 2015 Adjust font size:

The rate of growth of the British economy slowed a little over the three months to the end of August, according to figures released on Wednesday.

The National Institute of Economic and Social Research (NIESR) estimated growth slowed from 0.6 percent of GDP over the three months to the end of July to 0.5 percent over the three months to the end of August.

Despite the slight softening, growth remains close to the estimated long run potential of the economy, but below the average rate of growth (0.7 percent per quarter) observed since the start of 2013.

Jack Meaning, research fellow at the London-based economics think-tank and co-author of the forecast, told Xinhua, "This figure is somewhat in line from what we were expecting from our quarterly UK figures (released at the beginning of August). It is still a reasonable rate of growth, which is around the potential rate of growth figure rather than above it."

Meaning said weak production data had had a downward effect on the figures.

Any continued stagnation of the eurozone economy would have a downside effect on UK growth in the future, as it is Britain's main export partner, but the latest eurozone GDP figures, a second revision released on Tuesday, showed GDP up by 0.4 percent for the second quarter of this year and 1.5 percent over the same period a year ago.

"That is not overwhelmingly great, but it is certainly better than where they were some quarters ago. There, of course, exist risks going forward, but we would still expect around 2.5 percent growth for the year as a whole," said Meaning.

NIESR's latest quarterly forecast, published on Aug. 5, projects GDP growth of 2.5 percent per year in 2015 and 2.4 percent in 2016. Endit