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UK economy expanded 2.6% in 2014, the fastest since 2007

Thursday, January 29th 2015 - 07:55 UTC
Full article 11 comments
Chancellor George Osborne said figures showed the economy was “on track”, but warned the international economic climate was “getting worse” Chancellor George Osborne said figures showed the economy was “on track”, but warned the international economic climate was “getting worse”
Shadow chancellor Ed Balls: “Tory claims that UK economy is fixed will ring hollow with working people” whose wages are down by £1,600 a year since 2010 Shadow chancellor Ed Balls: “Tory claims that UK economy is fixed will ring hollow with working people” whose wages are down by £1,600 a year since 2010

The UK's economy grew by 2.6% last year, the fastest pace since 2007 and up from 1.7% in 2013, official figures have from the Office of National Statistics, ONS, have shown. The economy expanded 0.5% in the last quarter of 2014, which was a slowdown from the 0.7% of the previous three months.

 Economists were mixed over whether the loss of momentum in the final quarter might be temporary or prolonged. The ONS's chief economist, Joe Grice, said it was “too early to say” if this slowdown would persist.

“The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic,” he said.

But Nancy Curtin, chief investment officer at Close Brothers Asset Management, said the fourth-quarter figure “hardly set the world alight... and it's clear that [the economy] is slowing”.

She said: “There are clouds looming large on the horizon, and the general election is the biggest of these. Investors don't like uncertainty.”

The services sector grew by 0.8% in the quarter, but construction contracted by 1.8%. Manufacturing grew by just 0.1%, its worst performance since the start of 2013.

However Chancellor George Osborne said the figures showed the economy was “on track”. He warned that the international economic climate was “getting worse”, and so the government must continue with its economic strategy.

Shadow chancellor Ed Balls said the slowdown in fourth-quarter growth was a concern, and that “Tory claims that the economy is fixed will ring hollow with working people” whose “wages are down by £1,600 a year since 2010”.

The ONS figures are the first estimate of fourth-quarter UK growth and could be revised up or down as more economic data for the three months is gathered by the statistics office.

Economists at the Centre for Economics and Business Research (CEBR) said they “wouldn't be surprised if the ONS figures are revised up over time, painting a stronger picture for economic performance at the end of the year”.

The construction data which dragged down the fourth-quarter figures were “surprising and at odds with other indicators and surveys” which presented a healthier picture, the CEBR said.

The figures mean the UK was among the best-performing of the all the major economies in 2014. US growth figures are due to be published on Friday, with the International Monetary Fund (IMF) estimating expansion of 2.4% for the year.

The IMF forecasts UK growth of 2.7% in 2015. However, Samuel Tombs, of consultancy Capital Economics, has predicted growth of 3%.

“With the recent halving of oil prices providing a timely boost to households' discretionary spending power, credit still becoming cheaper and pay growth on an improving trend... the best days of the UK's recovery may still lie ahead,” he said.

Categories: Economy, Politics, International.

Top Comments

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  • Britworker

    We would be doing even better if we weren't giving 55 million pounds a day to the EU basket case.

    Jan 29th, 2015 - 09:50 am 0
  • CaptainSilver

    I noticed a comment by one senior German politician in which he said ”we dont want Greece to transform itself into an Economic basket case just like Argentina lead by that incompetent woman”

    The trolls can keep posting all those stupid bad Graniard stories about Britain but I would rather live here than anywhere else in the world.

    Jan 29th, 2015 - 10:31 am 0
  • Britworker

    I can't see a way forward for Greece in the Euro, how can they expect to get a debt write off and not end up in a situation where the rest of the PIGS quite rightly ask for the same. And what about the more prosperous hard working countries in North of the EU that financed the bail outs, are they expected to accept that this is punishment for running a country that is fiscally competent and Greece is rewarded for incompetence?

    Jan 29th, 2015 - 10:49 am 0
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