United Kingdom: Economy expands further in Q4
January 28, 2014
In Q4 2013, the economy expanded a seasonally-adjusted 0.7% over the previous quarter according to a preliminary estimate released by the Office for National Statistics (ONS) on 28 January. The figure met market expectations and slightly undershot the 0.8% increase recorded in the previous quarter.
Q4's figure reflected a slowdown in construction which fell 0.3% in the fourth quarter (Q3: +2.6% quarter-on-quarter). Conversely, agriculture rebounded from a 3.2% contraction in Q3 to a 0.5% expansion in Q4. In addition, industry improved slightly from 0.6% in Q3 to 0.7% in Q4. Services were stable at Q3's 0.8%.
In annual terms, GDP growth increased from 1.9% in the third quarter to 2.8% in the fourth quarter, which marked the fastest pace of growth since Q1 2008. In 2013, the economy grew 1.9% over the previous year, which was up from the 0.3% expansion recorded in 2012.
In its latest inflation report from November, the Bank of England (BoE) projects that the economy will grow 2.8% in 2014. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.5% in 2014, which is unchanged from the previous month's estimate. The panel sees growth accelerating to 2.2% in 2015.
Author: Dirina Mançellari, Senior Economist