The resilience of the UK economy is striking. Granted, we were not expecting a rapid transmission of the Brexit effect into activity data, but from there to a position of renewed dynamism is a leap. The UK took this leap, posting 0.5%quarterly growth in Q3.
It will be another month before details of the components of demand are published, but it seems most likely that growth was driven by consumption and exports. For the former, a reversal is to be expected. The significant depreciation of sterling is already having a marked effect on inflation, which willinevitably hit consumer purchasing power. Exports will benefit from the weaker pound, although we would not expect any particularly strong impact on economic activity.In the euro zone, the expected deceleration of growth is now taking clearer shape.
The quarter-on-quarter figures show respectable growth, particularly in Spain (0.7%), but suffer from fading supports (the depreciation of the euro and falling energy prices). France disappoints once more, with a limited rebound of 0.2% that owes muchto a rebuilding of inventories, something that could be corrected in Q4. The US returned another mixed bag: growth (2.9%, quarterly annualised rate) was stronger than in Europe, but below par given the economy’s potential and recent underperformance.