Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The UK economy grew by 0.4% in August, but GDP remains 0.8% below its pre-pandemic level in February 2020, according to the Office for National Statistics. The monthly gain is slightly less than the 0.5% rise economists had pencilled in, but a noticeable pick-up from July, when GDP slipped by 0.1%.
The GDP number for July has been revised from 0.1% growth to a 0.1% fall following five consecutive months of growth, mainly “because of downwardly revised data for the manufacture of motor vehicles, oil and gas, and improvements to how health output is measured”.
The service industries grew by 0.3% in August, bouncing back from a 0.1% drop in July, while manufacturing expanded by 0.5% following July’s 0.6% decline.
Overall production output climbed 0.8%, accelerating from July’s 0.3% rise, as crude oil and natural gas extraction bounced back following a temporary closure of oil field sites for planned maintenance. Construction continued to shrink, by 0.2%, and is now 1.5% below its pre-pandemic level.
In the three months to August, the economy grew by 2.9%, against forecasts of 3% growth.
Paul Dales, chief UK economist at Capital Economics, said.
The improvement in August probably had a lot to do with the fading of the restraint from July’s “pingdemic”, which at one point meant more than 1m people were self-isolating.
And the recent broadening in shortages and the fuel crisis may mean that growth has come to a near-standstill since August.
Victoria Scholar, head of investment at Interactive Investor, tweeted:
The ONS has also released trade data – we’ll take a closer look in a minute.
In China, export growth unexpectedly picked up in September, new data showed, despite power shortages, supply bottlenecks and a resurgence of Covid-19 cases. Outbound shipments jumped 28.1% from a year earlier, up from 25.6% growth in August, while economists had expected an easing to 21%. They are still expecting export growth to slow in months to come, amid falling global demand for durable goods.
Shares were mixed in Asia, with Japan’s Nikkei down 0.2% and Hong Kong’s Hang Seng losing 1.4% while the Shanghai composite index gained nearly 0.3% and South Korea’s Kospi was up almost 1%.
Later today, we’ll be getting US inflation data and the minutes of the US Federal Reserve’s last meeting.
- 7am BST: UK GDP and trade for August
- 7am BST: Germany inflation for September (final)
- 10am BST: Eurozone Industrial production for August
- 1.30pm BST: US inflation for September (forecast: 5.3%)
- 2pm BST: UK NIESR Monthly GDP tracker for Q3
- 3.30pm BST: Bank of England deputy governor for financial stability Sir Jon Cunliffe speech
- 7pm BST: US Federal Reserve minutes