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UK economy grows at fastest rate for more than two years
The UK economy grew by 0.7% in the three months to September, its fastest rate of growth in more than two years. The stronger-than-expected figures suggest consumer activity proved more resilient over the summer than anticipated.
Growth was driven by the services sector, including consultancy, hotels and restaurants. Prime Minister Andy Burnham welcomed the figures, saying the economy was growing despite global events pushing up costs at home; further details were expected.
In short
- The economy grew by 0.7% in the three months to September.
- Growth was the fastest in more than two years.
- Services helped drive the stronger-than-expected performance.
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The case for
The 0.7% growth rate suggests the economy and household spending held up better than expected, with services such as hotels and restaurants benefiting from consumer activity. Supporters may see this as evidence that the government’s economic approach is helping to sustain growth despite higher costs and global pressures.
The case against
One strong quarter does not establish a lasting recovery, and growth concentrated in services may not be shared evenly across households or sectors. Critics may argue that rising costs still weigh on living standards, so the figures alone do not show that people are feeling better off or that the economy is on a durable growth path.
Explained simply
The UK economy is the combined value of goods and services produced across the country. Growth means that value has risen over a period; it can reflect changes in household spending, business activity and public services.
Services make up a large part of the UK economy and include areas such as hotels, restaurants and consultancy. Households, businesses and the government all influence demand for these services, while the prime minister and government set policies that can affect jobs, taxes and public spending.
Economic growth matters because it can shape employment, incomes and the government’s tax revenues. A single period of growth does not show how living costs or household finances have changed, and figures can be revised as more information becomes available.