Household Spending Drives UK GDP Growth in Q4

The British economy advanced 0.5 percent on quarter in the last three months of 2015, in line with the preliminary estimate. Growth was mainly driven by household spending while gross fixed capital formation and exports decreased, figures from ONS second estimate showed.

Household spending made the biggest contribution to growth, up 0.7 percent, following a 0.8 percent increase in the previous quarter, mainly driven by furniture and furnishings. Government expenditure grew 0.5 percent, slightly less than 0.6 percent in the previous period and non-profit institutions serving households’ consumption increased 0.5 percent, rebounding from a 1.5 percent fall.  

In contrast, gross fixed capital formation declined 0.1 percent, of which business investment shrank 0.2 percent. Exports declined 0.1 percent while imports increased 1.2 percent, bringing net trade contribution to -0.4 percentage points and widening the trade deficit to GBP 16.6 billion from GBP 14.7 billion. 

Year-on-year, the economy advanced 1.9 percent, also matching preliminary estimates, slowing from a 2.1 percent expansion in the previous period and the lowest growth rate in nearly three years.

Considering full 2015, the GDP grew 2.2 percent, lower than 2.9 percent in 2014.

Household Spending Drives UK GDP Growth in Q4

ONS | Joana Taborda |
2/25/2016 10:21:26 AM