United Kingdom Economy Bounced Back In Third Quarter

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The UK economy grew by 0.5% in the third quarter of 2011

, according to official figures from the Office for National Statistics (ONS).The 0.5% quarterly rise in GDP [we expected 0.3%] was driven by a 0.7% jump in services output. This it reflected strong growth in transport and business services/finance. We would expect these figures to continue to improve next year as inflation slows. Slightly better news on household income too, with the squeeze beginning to loosen.

Third-quarter GDP growth of 0.6pc quarter-on-quarter substantially overstates the underlying health of the economy as it was lifted by a catch-up effect from activity lost to temporary dampening factors in the second quarter. The ONS cited the strength of the services and production sector as drivers behind the increase. Conversely, the construction sector recorded a small decline in output. In addition, the ONS added that the August riots had no "significant impact" on the GDP figures for the third quarter.

The profitability of UK companies rose modestly in the third quarter of 2011 after falling to a two-year low in the third quarter, despite a weak economy. The ONS said that despite a general perception that British companies were currently in strong cash and balance sheet position, this strong financial position is accompanied by an ongoing sense of caution, despite resilient sentiment surveys. Nick Robertson, CEO of Asks, said: I am pleased to report a strong third quarter performance across all territories including the UK. Overall retail sales were 46 per cent up year-on-year and our retail gross margin was 300bps higher over the period, in line with guidance. Just send a message and apply for txt loans and get quick cash in this economic slump.

Later, he also added: With the business continuing to perform well through these challenging economic times, we remain confident about the outlook and expect our full year results to be in line with market expectations. However, Details show that a solid inventory boost (contributing 0.6 percentage points to headline growth) masks still-subdued underlying activity, indicating that UK activity remains highly vulnerable to shocks. Overall we expect UK's GDP to contract 1.3pc in 2012. This expected recession means a high risk of missing budget targets in coming months. So life will be not normal in United Kingdom, the economy is still under a slump despite measures have been taken to stabilize it. The economy will take further more time to become constant.

by: Kevin Cook

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