UK economic growth picks up to 0.7% in third quarter

The U.K. economy grew 0.7% in the third quarter of the year, in line with estimates, driven by output in the services sector.

Economists polled by Reuters had expected the economy to grow 0.7% from the previous quarter.

The economy grew 1.9% year-on-year in the three months to September

The figures showed a slight improvement from the previous quarter, when gross domestic product grew by 0.5%. In the first quarter, the economy grew by 0.6%.

The services sector expanded by 0.9%, data from the U.K.'s Office for National Statistics showed on Thursday morning. It offset output growth of 0.1% in the production sector and a 0.7% contraction in construction.

In September, the economy grew by 0.2% month-on-month, beating expectations that GDP would flatline. It marked an improvement from the previous month, with revised figures showing the British economy carved out zero growth in August.

U.K. finance minister John Healey said in a statement that the country was showing "stand-out resilience" despite the U.S.-Iran war hitting growth worldwide.

"Our U.K. economy is growing at the fastest rate in almost ten years, outside the pandemic," he said.

Prime Minister Andy Burnham said the third-quarter growth was "bringing hope for the future."

The British pound was down by 0.2% against the U.S. dollar and flat against the euro on Thursday morning. Yields on U.K. government bonds were little changed.