UK Economy Slows More than Expected


British GDP advanced 0.5 percent on quarter in the last three months of 2014, below market expectations and compared with a 0.7 percent expansion in the previous period. Preliminary estimates showed services were the main driver of growth while construction and mining shrank.

The largest contribution to Q4 2014 GDP growth came from services; these industries increased by 0.8 percent, contributing 0.62 percentage points to the increase in GDP. This followed an increase of 0.8 percent in Q3 2014. In the latest quarter there was widespread growth, with increases in three of the four main services aggregates (distribution, hotels & restaurants; transport, storage & communication; business services & finance). Output from government & other services was flat for Q4 2014. Growth in each of the main services aggregates was lower than in Q3 2014 with the exception of distribution, hotels & restaurants which grew by 1.3 percent, following a rise of 0.7 percent for Q3 2014. Retail made the largest positive contribution to the increase. In Q4 2014 output from services was 7.9 percent above its pre-economic downturn peak in Q1 2008.

There was a downward contribution (0.02 percentage points) from the production industries; these industries fell by 0.1 percent, with energy supply decreasing by 2.8 percent reversing an increase of 2.8 percent in Q3 2014, and mining & quarrying decreasing by 0.6 percent following a decrease of 1.6 percent in Q3 2014. The decrease in energy was mainly caused by a decrease in the manufacture of gas. 

Partially offsetting these decreases was a rise of 1.2 percent in water & waste management, following a decrease of 0.3 percent in Q3 2014, and a rise of 0.1 percent in manufacturing following an increase of 0.3 percent in Q3 2014. 

Construction output decreased by 1.8 percent in Q4 2014 when compared with Q3 2014, contributing -0.11 percentage points to GDP growth and follows a rise of 1.6 percent in Q3 2014.

Agriculture, forestry and fishing activities expanded at a fastest 1.3 percent in the fourth quarter of 2014 (0.5 percent in the previous period). 

Year-on-year, the economy advanced 2.7 percent and considering full 2014, the GDP was up 2.6 percent on 2013.

UK Economy Slows More than Expected


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
1/27/2015 9:54:12 AM