National Institute of Economic and Social Research (NIESR) reported on Wednesday its estimates revealed the UK’s economy is on course to grow by 0.3 percent in Q3, following a 0.2 percent contraction in the second quarter. This is higher than the 0.2 percent advance that NIESR had penciled in last month.

Dr. Garry Young, Director of Macroeconomic Modelling and Forecasting, noted: “It looks like there has been a welcome resumption of economic growth in the third quarter, roughly offsetting the fall in the second quarter. But it is not clear how long growth will continue. Only the services sector is expanding, primarily to meet higher demand from consumers driven by increased household incomes fuelled by rising real wages.  But there is a limit to how much further real wages can grow without a pick-up in investment and productivity, and this seems unlikely in the near term.”