UK economy's growth in third-quarter revised up, smallest current account gap since 2012

Britain’s economy grew a little faster in the third quarter than first estimated and the country’s current account deficit shrank to its smallest since 2012, official data showed on Friday.

Figures from the Office for National Statistics (ONS) showed the economy grew 0.4% in the third quarter of the year, better than a previous estimate of 0.3% and boosted by upward revisions to services and construction output.

A Reuters poll of economists had pointed to an unrevised reading.

The ONS said a surge in goods exports helped Britain’s current account deficit narrow to 15.860 billion pounds in the third quarter of 2019 from 24.152 billion pounds in the second quarter, roughly in line with expectations.

As a percentage of economic output, the deficit fell to 2.8%, its smallest since early 2012.

BoE Governor Mark Carney described Britain as dependent “on the kindness of strangers” before the 2016 Brexit referendum, and on Monday the BoE said the current account deficit still posed economic risks.

A drop-off in foreign investors’ demand for British assets could trigger a further fall in sterling and make it harder for businesses and consumers to raise finance or borrow.

Since the third quarter, Prime Minister Boris Johnson swept to a landslide victory last week that removes some of the political uncertainty hanging over the British economy.

Nonetheless, he has promised to strike a trade deal with the European Union by the end of this year and will not extend the Brexit transition — a deadline that leaves open the prospect of another cliff-edge for businesses and investors.

Britain’s economy has slowed since the Brexit referendum, and now faces increased headwinds from trade tensions between the United States and China and a slowdown in Europe.

The economy grew by 1.1% in the year to the end of September, up from an earlier estimate of 1.0%. A Reuters poll of economists suggested the economy will grow 1.3% this year.

The BoE said on Thursday it was waiting for more signals about how much last week’s election was easing the uncertainty that has weighed on the economy.