George Osborne
Production output was up 0.3%Getty

The UK economy Gross Domestic Product (GDP) grew by 0.5% in the third quarter of 2015, the Office for National Statistics (ONS) has reported. In the second quarter, GDP grew by 0.7%. The slowdown was on the lower side of market consensus.

In bad news for chancellor George Osborne, the economy could not continue its strong growth. The second quarter increase was a pleasant surprise for the UK, up from a 0.4% growth in the first quarter.

Against a services output hike of 0.7%, production output showed to be slower, growing by 0.3%. Compared to the third quarter of 2014, GDP was 2.3% higher.

"UK continues to outperform other major economies," Osborne commented on twitter. "But global risks mean we go on with tough decisions to live within our means." The chancellor has continued to expressed his concerns regarding global volatility, as emerging markets, especially China, show significant signs of economic slowdown.

The overall increase in GDP has been around 6.4% since before the crash in the first quarter of 2008. Although the UK's economy is leading the pack of developed economy in terms of growth, its trade balance is still weak and other data shows that the picture might not be as bright as initially painted.

Jeremy Cook, chief economist at World First, said that it was apparent the UK could not "dodge the bullet" as the world suffered from a third quarter that saw significantly low manufacturing output.

"As economists have highlighted for years now in the UK, the recovery has been characterised by a divergence in fortunes of the manufacturing and services sector," Cook said. "Today's data only reinforces this problem with manufacturing contracting by 0.3% and services expanding by 0.7%. We are still seeing a 'Strowl of the Shoppers' more than a 'March of the Makers'."

UK policy makers have long been expected to postpone an interest rate hike until 2016 earliest, as inflation has proven to be well below the 2% target set by the Bank of England. Market consensus is now that the MPC will put off increasing the interest rate until the second quarter of 2016.

"The Bank of England has remained pretty sanguine about the impact on the UK economy of the emerging market rolling over but today's number will keep the Monetary Policy Committee from doing anything this year."

As commodity prices have plummeted on the back of oversupply from emerging markets and falling demand from China because of its slowing economy, production and the manufacturing sector in the UK are struggling to add significant growth to the UK economy.