UK economy expands less than forecast


UK economic growth cooled as manufacturing contracted for a third quarter and construction shrank the most since 2012, a sign that Britain may be falling prey to global headwinds. The slowdown to 0.5% in the three months through September from 0.7% was sharper than economists had forecast. The Office for National Statistics said construction shrank 2.2% in the quarter and manufacturing contracted 0.3%, while overall production growth cooled to 0.3% from 0.7%. The report may signal that the emerging-market slowdown has damaged prospects for Britain’s expansion, and Chancellor of the Exchequer George Osborne said it shows the U.K. faces “clear global risks.” Bank of England Governor Mark Carney, who has previously said the timing for the first step to tighten policy will become clearer around the turn of the year, said Sunday that if increases aren’t needed, officials won’t act. “The peak growth rate is probably behind us,” Kit Juckes, global strategist at Societe Generale, said in an interview on Bloomberg Television in London. “I think this keeps him on hold for now. What he is going to be looking at is the wage growth numbers. He’s got an economy that’s growing just sluggishly steadily.” By Jennifer Ryan (Bloomberg)

More from Business News