The UK economy grew by more than previously thought in 2012, official figures have shown. The Office for National Statistics (ONS) revised its growth estimate for the year up from no growth to 0.2%. But the figure for the last three months of the year was left unchanged at a quarterly contraction of 0.3%.
Last week, credit rating agency Moody's downgraded its rating of the UK economy over fears that growth would remain sluggish over the next few years.
The revisions earlier in the year came in the first quarter, which was lifted from a 0.2% contraction to a 0.1% contraction while growth in the third quarter was upgraded from 0.9% growth to 1.0%.
The third quarter was boosted by the Olympic Games, with all ticket sales being assumed to have taken place in that three-month period. Growth in the fourth quarter of 2012 compared with the fourth quarter of 2011 was revised up from zero to 0.3%.
There were some revisions to the performances of individual sectors in the fourth quarter.
The service sector, which accounts for three-quarters of the UK economy, was revised down to a 0.1% contraction, compared with zero growth in the first estimate. The production sector was revised down from a 1.8% contraction to a 1.9% contraction. But the construction industry performed much better than first estimated, growing by 0.9% against an initial figure of 0.3%.
The release from the ONS also gave the first expenditure figures for the last three months of 2012, with consumer spending up 0.2%, exports down 1.5% and imports down 1.2%. Investment by businesses fell 0.4%.
Any growth we saw last year was down to consumers and some solid quarterly contributions from government spending, with net trade and investment still struggling to get going, said Lee Hopley, chief economist at EEF, the manufacturers' organisation
The continued reliance on consumption and the lack of progress on rebalancing away from it continues to present risks to growth prospects in the coming years.
John Longworth, director general of the British Chambers of Commerce, said: These figures, coupled with the recent downgrade of the UK's credit rating, confirm that action must be taken quickly to get the economy growing again.
The chancellor should seize the opportunity in next month's Budget to be radical, and introduce measures that create an environment of enterprise, stimulate export growth, kick-start infrastructure projects and create a structure of business finance which supports growing companies”. (BBC)