The Markit/CIPS all-sector output PMI was more or less unchanged in Q3 compared to Q2, consistent with GDP growth remaining steady at 0.4% q/q. However, we think that growth was a little bit stronger than this. The official data showed that rolling three-month GDP growth hit 0.6% in July, the fastest pace since February 2017. Admittedly, growth in construction output probably eased off in August and September having recovered the ground lost at the start of the year to poor weather. And the survey evidence suggests that industrial production might have flat lined. But the services sector appears to have continued its recent strong run of form. Even if we are right in thinking that the economy expanded by 0.5% in Q3 – which would make it the strongest quarter since the beginning of 2017 – the economy would still only be on track to grow by 1.3% in 2018 as a whole.
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