Weak Trade Holds Back UK Economic Recovery

Britain's slowdown has been confirmed as poor trade performance held back the economy and the recovery remained "unbalanced" towards domestic growth.

The Office for National Statistics (ONS) said that gross domestic product (GDP) grew by 0.5% in the third quarter, down from 0.7% in the previous period.

Its latest, more detailed, estimate, showed trade posed the biggest drag on quarterly growth on record, lopping 1.5 percentage points off growth - as imports saw their biggest growth in ten years.

The UK's slowdown comes as British exporters struggle amid global turmoil, with China's economic surge losing steam.

Domestic growth remains strong, with consumer spending up 0.8% in the third quarter - its ninth rise in a row.

But while the services sector, which dominates the economy, continued to power ahead, the beleaguered manufacturing and construction industries fell back.

Scott Bowman, UK economist at Capital Economics, said: "The second estimate of Q3 GDP showed that growth in the UK continues to be unbalanced.

"While we think that the slowdown in growth in Q3 will be temporary - indeed business surveys have bounced back in October - any acceleration will probably continue to be led by domestic demand and the service sector."

Howard Archer, chief UK and European economist at IHS Global Insight: "Confirmation of reduced GDP growth of 0.5% quarter-on-quarter reinforces our belief that the Bank of England is unlikely to raise interest rates before the second quarter of 2016."