The growth in the third quarter was driven by increased activity mainly in the services sector and the production sector and a small decline in construction output.
Output in the services sector grew by 0.7% compared with a rise of just 0.2% in Q2. The production sector showed growth of 0.5% following a fall in output of 1.2% in Q2, while the construction sector posted a fall in output of 0.6% following a rise of 1.1% in Q2.
The preliminary estimate was ahead of expectations, with economists pencilling in 0.3% growth.
The GDP figure has improved from the sluggish second quarter figure of just 0.1%, which was revised down last month due to a slowdown in growth in the services sector.
Ed Balls MP, Labour’s Shadow Chancellor, said the economy has been flatlining where the country needs strong growth to get unemployment and the deficit down.
“As the ONS has said today, growth of just 0.5 per cent over the past year since the Chancellor’s spending review – compared to 1.6 per cent in the US – is a significant slowdown from the 2.6 per cent we saw in the previous twelve months when we were starting to recover from the global financial crash.
“The fact is that our recovery was choked off well before the eurozone crisis of recent months by spending cuts and tax rises which go too far and too fast.
He said the stagnant growth means the government is set to borrow £46bn more than planned and that the Chancellor will have to downgrade his growth forecasts for a fourth time later this month – and revise up his borrowing forecasts again.
