The U.K. economy grew faster than economists forecast in the third quarter as it rebounded from one-off factors before an escalation of Europe’s debt crisis that threatens to push Britain back into recession.
Gross domestic product rose 0.5 percent from the second quarter, when it increased 0.1 percent, the Office for National Statistics in London said today. Economists forecast 0.3 percent, based on the median of 36 estimates in a Bloomberg News survey. A separate report showed manufacturing unexpectedly shrank the most in 28 months in October, pointing to weakness at the start of the fourth quarter.
The Bank of England expanded stimulus for the first time in two years last month and the government is working on a plan to boost lending as Europe’s debt crisis raises the risk of another U.K. recession. With the increase in third-quarter GDP partly due to a rebound from one-time factors, Bank of England Markets Director Paul Fisher has said the pace may not be sustained and there’s a chance of stagnation in the current quarter.
