UK Q3 GDP matches forecasts, supporting BOE's inflation focus

• UK Q3 preliminary GDP +0.7% vs +0.7% q/q expected
• Prior +0.5%
• UK Q3 preliminary GDP +1.9% vs +1.9% y/y expected
• Prior +1.4%

The quarterly data met expectations, with the UK economy posting a resilient 0.7% quarter-on-quarter expansion and annual growth of 1.9% in the third quarter.

The details indicate services were the main driver, adding 0.77% to three-month GDP. Production contributed a further 0.01%, while construction was a drag at -0.04%. The overall result leaves the UK economy up 0.7% (rounded) in the three months through September.

The September monthly figures show the economy held up as the third quarter closed, defying concerns about more uneven conditions earlier in the period.

This gives the Bank of England room to stay focused on combating inflation amid some evidence of ongoing resilience. With markets pricing about a 71% chance of another rate hike in December, Friday's GDP release is unlikely to alter that view, leaving traders expecting a potential move by the central bank before year-end.