CBI urges Government to 'ratchet up productivity' as UK growth slows
28 Oct 2015
The CBI has urged the Government to ‘support the ratcheting up of UK productivity’, as the latest figures from the Office for National Statistics (ONS) show that economic growth has slowed in the third quarter of 2015.
According to the ONS, gross domestic product (GDP) grew by 0.5% between July and September of this year, down from 0.7% in the second quarter and lower than the 0.6% growth predicted by many economists.
The construction and manufacturing sectors were largely responsible for the weaker-than-expected growth, with construction output experiencing a drop of 2.2%, the biggest fall in three years.
The ONS suggests that this could be partly explained by the unusually wet weather conditions in August, affecting the ability of building firms to work to schedule.
However, the service sector – which is the largest sector in the UK economy – did grow by 0.7%, and overall the general trend of steady growth is unchanged.
CBI Director of Economics, Rain Newton-Smith, said: ‘These GDP figures show momentum continuing in the UK economy. Consumer spending, improving productivity and wages continue to bolster UK growth. But the weaker global outlook, combined with the strength of sterling will keep the pressure on UK manufacturers, as our recent surveys show.
‘As we approach the Spending Review and Autumn Statement, it is vital that the Government protects areas of spending which will support the ratcheting up of UK productivity, helping to underpin sustainable public finances.’
Chancellor George Osborne has stated that his Autumn Statement, due on 25 November, would include ‘long-term investments for the future’.
The latest ONS figures are only the first estimate of economic growth for the July-to-September period and incorporate only half the data which will be used for the final estimate. Estimates of growth are often revised upwards when the final figure is calculated.