According to data released by the Office for National Statistics in London, the economy in the UK is beginning to pick up despite experiencing the biggest export drop in over two years.
Gross domestic product climbed 0.8%, which had matched a preliminary estimate, said the government agency today. A 1.4% increase was seen in business investments despite a 2.4% decrease in exports and a 0.9 percentage point in net trade knocked off from GDP.
This month, the Bank of England increased its growth forecasts and said it is timely for policy makers to mull over increasing the key interest rate prior before unemployment would reach the 7% threshold. However, central bank governor Mark Carney said they will not immediately raise rates until a slack in the economy is still seen.
London-based Capital Economics Ltd economist Samuel Tombs said, "The further improvement in many of the timely business surveys suggests that the economy will continue to grow strongly in the fourth quarter. With firms now showing signs that they are willing to spend their cash stockpiles and the pound still at a relatively weak level, it seems likely that the recovery will become better-balanced soon."
Bloomberg said in its report that one of the domestic drivers of UK's economic growth is business investment. The increase in business investments were said to have a positive effect on gross fixed capital formation, lifting it by 1.4% in the third quarter. Business investments in the third quarter also contributed 1.1 percentage points in UK's GDP.
Because of the increase in business investments, the Office for National Statistics said increase in transport equipment and new real estate was seen, including new home constructions. Investment in dwellings seen in the private sector climbed 5.9% in the third quarter, said the government statistics agency, thanks to property demand revival with the support of a government program.
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