The fragile picture of the economy echoed the sharply weaker outlook announced on Wednesday by Britain's budget watchdog, which prompted finance minister Philip Hammond to say he would spend more over the next two years The Office for National Statistics said overall economic growth sped up moderately in the July-September period to 0.4 percent from 0.3 percent in the second quarter, confirming a preliminary reading.
Gross domestic product grew 0.4 percent sequentially, slightly faster than the 0.3 percent expansion posted in the second quarter.
The yield on the benchmark 10-year gilts, slumped 2 basis points to 1.25 percent, the super-long 30-year bond yields also slipped almost 1 basis point to 1.82 percent and the yield on the short-term 2-year too traded 2 basis points lower at 0.44 percent by 10:30GMT.
The Office for Budget Responsibility predicted the economy will grow 1.5 percent this year instead of the 2 percent envisaged in March and predicted growth will stay well below 2 percent through 2022.
On the expenditure side, household spending advanced 0.6 percent and government expenditure climbed 0.3 percent. Year-on-year business investment was up 1.8%, which was down from previous quarter's 2.5% but above the 1.4% forecast.
A strong increase in consumer spending drove UK GDP growth in the third quarter, but economists warned the British economy's reliance on consumption will not last.
Net trade was shown to have had a negative effect on quarterly GDP growth, down 0.5 percentage points or 0.2 if excluding volatile gold flows.
But the breakdown of the figures showed the economy remained reliant on spending by households who are suffering a squeeze on their incomes from rising inflation and slow wage growth.
The lower productivity forecasts will mean slower growth in the years ahead than previously expected, the OBR said. "We hold out little hope for a revival in net trade or investment in the near-term, given the still-huge uncertainty about the United Kingdom trade ties with the rest of the world".
"Households have dug into their pockets and their spending increased at the fastest pace in a year". But business investment slowed and net trade acted as a drag on growth.