The UK recovery has past its peak, but growth remains better than major competitors.
No great surprise that UK growth has slowed a bit in the three months to September, from an annual rate of 3.2% to 3%.
Growth in distribution (largely shopping), hotels and restaurants of 4.4% in the previous quarter, and 4.9% and 4.4% respectively in the preceding quarters, was looking a bit frothy.
So it is not necessarily a bad thing that there appears to have been slight moderation in this proxy for household consumption to 3.8%.
The much tinier manufacturing part of the economy grew faster than GDP as a whole at 3.4% – so the Chancellor can claim there has been some useful rebalancing, to make the economy a bit less dependent on consumption and services.
And the Bank of England’s Monetary Policy and Financial Policy committees need have fewer worries that the economy is already becoming too dependent again on debt-fuelled household spending.
Even so the production sector of the economy, which includes manufacturing, is still 9.6% smaller than it was before the crash, whereas the much larger services sector is 7.1% bigger.
Which is why the economy as a whole is 3.4% bigger than prior to the Great Recession – though on a per head basis, the UK has still not quite made up lost production.
I spoke to the Chancellor about all this at Toyota’s plant in Derby.
George Osborne takes comfort that there is still strong momentum in the economy, at a time when the eurozone has run out of puff.
But he repeated what he told me a fortnight ago, that we cannot be immune to the growth-braking impact of stagnation or worse in France, Italy and Germany.
So the UK’s economic recovery is by no means over. But it is entering a gentler phase.
And here is the thing. Growth in coming months, of whatever speed, may become a bit more dependent again on household consumption – because overseas demand for our goods and service is likely to diminish (and read why this could turn into a nightmare).
So that much touted and desired rebalancing of the economy towards manufacturing and exports, and away from shopping, may be postponed (again).