Economic growth was revised slightly weaker in the third quarter. Total output is now estimated to have contracted 0.1 percent versus the previous period which is now reported as unchanged from its second quarter level. The revisions reduced annual growth to 0.3 percent in both quarters.

Household spending declined a steeper revised 0.5 percent on the quarter, reversing the second quarter's 0.5 percent gain and its first drop since the end of last year. Gross fixed capital formation was even weaker, slumping fully 1.6 percent, within which business investment was down some 3.2 percent, albeit after a cumulative increase of more than 5 percent in the previous two quarters. Government spending rose 0.8 percent following a 2.6 percent jump. With business inventories (excluding alignment and balancing) adding 0.4 percentage points, total domestic demand declined 0.3 percent.

The contribution from net foreign trade was trimmed to just 0.1 percent with exports now seen falling 0.6 percent and imports 1.0 percent.

The minor headline revision potentially opens the door to recession by year-end. However, so far the fourth quarter data have held up relatively well and it may be that GDP growth will carry a small positive handle. Either way, business activity is clearly soft and today's report will ensure that financial markets continue to anticipate interest rate cuts in 2024. That said, with the UK RPI now at minus 7 and the RPI-P at 4, in general terms the economy is currently performing much as the forecasters anticipated.

No revisions are expected leaving a zero quarterly change and a 0.6 percent yearly increase in total output.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Since 2018, the first, or provisional, estimate includes the GDP expenditure components as well as data on the main output sectors. These results are updated in the second, and final, report.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower.

Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth. For example, if the UK reports that the consumer price index has risen more than the Bank of England's 2 percent inflation target, demand for sterling could decline. Similarly, when the Bank of England lowers interest rates, the pound sterling weakens. (Currency traders also watch the interest rate spread between countries.)