UK business investment suffers 'unexpected' drop in Q3

clock

Business investment fell by 0.7% in the third quarter despite a steadily growing economy, Office for National Statistics data has revealed.

The drop, which means business investment was estimated to stand at £44.6bn in the third quarter, bucks a recent trend of consistent growth. Despite the decline, the total amount remains 6.3% higher than in the same quarter last year.

It comes as the ONS confirmed its previous estimate of a 0.7% increase in UK GDP for the third quarter. On an annual basis, GDP grew by 3%.

All the four main industrial groups experienced growth, although growth in production was revised down from the previous estimate.

Seneca Partners director Richard Manley said:"GDP came in as expected but it is disappointing to see that business investment fell during the third quarter.

"The drop in business investment is slightly unexpected given that overall business confidence has picked up considerably over the past year. This dip underlines that there is still a problem in the business community and that problem is the perennial one of access to finance."

Elsewhere, however, the economy benefited in Q3 from a jump in consumption - total domestic expenditure increased by 1.2% in the quarter, buoyed by the thirteenth consecutive positive quarter-on-quarter increase for household final consumption expenditure.

The surge was accompanied by an increase in wage growth, with compensation for employees climbing by 1.2% in the third quarter.

More on Investment

Partner Insight: A continued bright spot in high yield

Partner Insight: A continued bright spot in high yield

Compelling income opportunities supported by favourable fundamental and technical conditions continue to attract investors to high yield bonds and loans.

Scott Roth and Chris Sawyer, Barings
clock 19 September 2024 • 4 min read
Partner Insight: US election and trade policy - What investors need to know

Partner Insight: US election and trade policy - What investors need to know

Presidential election will shape the pace of deglobalisation

T.Rowe Price
clock 17 September 2024 • 3 min read
Partner Insight: AllianzGI's Giles Money and Alex Bibani on the Global Sustainability Strategy

Partner Insight: AllianzGI's Giles Money and Alex Bibani on the Global Sustainability Strategy

Launched in 2003, the Allianz Global Sustainability fund was one of the first global sustainability funds, and AllianzGI is proud of this long track record and the firm’s pioneering stance in this area. Portfolio Managers Giles Money and Alex Bibani have...

Giles Money | Alex Bibani, Allianz Global Investors
clock 16 September 2024 • 8 min read
Trustpilot