Rise in consumer spending fails to boost UK economic growth

CONSUMERS spent more on housing, transport, recreation and culture in the third quarter of this year, ending five quarters of decline, according to figures from the Office for National Statistics.

But economic growth between July and September was left unchanged in revised figures despite the strongest performance for household spending in more than a year.

Gross domestic product grew at 0.5 per cent in the third quarter, compared with 0.1 per cent in the previous three months. Increased spending on housing, transport and recreation and culture was not enough to lift overall GDP as production growth was revised down from 0.5 per cent to 0.4 per cent and services output was cut from 0.7 per cent to 0.6 per cent.

Economists warned that the third quarter was flattered as the economy played catch-up from the previous three months, which was hit by the extra bank holiday for the royal wedding and the Japanese tsunami, with most indicators pointing towards flat growth in the three months between October and December.