In addition to indications for a gathering slowdown in export power Germany, the UK has followed a similar line of late. That would make sense since both Britain and Germany are essentially the same kind of economy separated slightly in geography and currency. They both make much of their growth from the same marginal space; financial services, exports to the rest of Europe and exports to the outside. The crush of the real estate boom perhaps reversing along with, relatedly, financial uncertainty worldwide, has left the UK in a more precarious state now after the Bank of England having already taken credit for engineering a full recovery path.
“The UK economy’s momentum has begun to ease in light of increasing uncertainty and a weaker global environment, as we expected, but remains decent,” Barclays economists said in a note to clients.
Growth was almost entirely driven by Britain’s dominant services sector, which picked up pace from the second quarter, while manufacturing shrank for a third quarter in a row and construction suffered its biggest contraction in three years.
Year-over-year, UK GDP slowed to 2.3% which was the lowest expansion rate since the middle of 2013; though, it has to be pointed out repeatedly, that is much, much better than most other advanced nations. But, we are told in rather charitable connotations, even with the slowdown the UK is apparently in a much better place:
Britain’s economy as a whole is now more than 6 percent larger than before the financial crisis, but neither the manufacturing nor the construction sectors have returned to pre-crisis levels of activity.
The open mimicking of Bernanke’s benchmark of success is dispiriting, as 6% total growth over almost eight years is, as noted of the US economy today, an abomination. It is little wonder that such a diminished standard would be shared with Britain since both contrast, as the former Fed Chair asserts, with European monetarism. In other words, the Bank of England enthusiastically embraced QE’s just as much as the Federal Reserve (in purported contrast to the ECB’s “conservative” German elements).
