Economic review

Abstract

This month's Economic Review article looks at three aspects of the UK economy as described by the latest official statistics. First, preliminary estimates of Gross Domestic Product show that the economy expanded by 0.8 per cent in the third quarter of the year. Growth was broadbased across the main sectors of the economy, with construction output recording a particularly strong increase for the second quarter in a row. Second, total employment increased by 178,000 in the three months JuneAugust 2010. Most of the increase was accounted for by male employment and by parttime employment. Employment rates for the under 25 age group though remain low, having fallen significantly during the recession. Total hours worked increased in this same threemonth period, but most of the increase was attributed to an increase in average hours worked rather than employment. Ahead of the Spending Review there was a decline in vacancies, with the largest falls in the predominantly public services industries. However, redundancies remained at normal rates. Third and finally, some financial statistics relating to UK households and corporations are analysed. The housing market weakened in the third quarter as average prices fell and numbers of mortgage approvals remained at low levels. Households and firms have continued to paydown debts. Households have continued to show little appetite for relatively expensive consumer credit, and private nonfinancial corporations have continued to build cash surpluses as a result of low investment intentions and the uncertain economic outlook.