No UK growth without services

In the circumstances of a slowing global economy, the 0.5% quarter-on-quarter growth in UK GDP or national income, down from 0.7%, is more than respectable.

And the point is that our giant service sector - which is almost 80% of our economy - continues to power ahead, expanding 0.7% compared with the previous three months.

Thank goodness we're still shopping till we drop, and that we have a world-class business services and finance sector (probably needless to say that the banking bit of the latter isn't universally popular - but we can't wish its size and competitiveness away).

Of course if there is a worry about the growth of services it is that it's driven to a great extent by our own spending, which is why we continue to run big deficits on our trade and investment with the rest of the world.

And that's not sustainable in the long term.

But it's hard to argue, with employment at record highs, that we'd be better off without our services prowess.

Anyway the only substantial drag on growth was a sharp 2.2% quarter-on-quarter fall in construction.

That sector is volatile - although property companies tell me that the drop in building activity, especially in London, is significant and may go on for a bit.

As for manufacturing, well it's in recession - again - having fallen for two quarters and stagnated at the start of the year.

I've said it before and I'll say it again: there has been zero rebalancing towards the so-called makers since the crash of 2008, in spite of government pledges to the contrary.

So our service sector is now 11% bigger than its pre-recession peak, whereas manufacturing is more than 6% smaller.

And although we love to flagellate ourselves that this concentration on services means our economy is in some sense inferior to Germany's, it is worth noting that the UK economy is currently 6.4% bigger than before it all went pear-shaped, whereas Germany's is only about 5% bigger.

And that manufacturing economy Italy is 9% smaller than seven years ago.

Anyway enough with the cheery British news.

We're not immune to the Chinese-led worldwide deceleration. And all the signs are that growth in the fourth quarter of the year will soften again.

This doesn't mean a painful recession is about to rear up and bite us. Annual growth for 2015 is heading for a healthy, if slightly below trend, 2.3%.

But it does mean the ride into 2016 may get slower and bumpier.