Economic growth slows to 0.5% in Q4

The UK economy grew by 0.5 per cent during the fourth quarter of 2014 and by 2.6 per cent over the year, the Office for National Statistics (ONS) said today.

The preliminary estimate for the three months of December compares with growth of 0.7 per cent in the third quarter, and fell short of economists’ forecasts of 0.6 per cent.

The ONS said output in the dominant services sector expanded by 0.8 per cent, while agriculture grew by 1.3 per cent. In contrast, output decreased by 1.8 per cent in construction and 0.1 per cent in production.

Chancellor George Osborne welcomed today’s figures, arguing that 2.6 per cent annual growth for 2014 was the “fastest of any major economy”.

But Nancy Curtin, chief investment officer at Close Brothers Asset Management, said: “UK economic growth hardly set the world alight in the fourth quarter, and it’s clear that it is slowing.

“Improving consumer spending was instrumental for the economy in 2014, as it will be in 2015, with oil prices falling and low inflation likely to boost disposable incomes. However, it is not enough by itself. A broader recovery is now necessary to inject fresh impetus.”