The Courier & Advertiser (Angus and Dundee)
Economists warn of UK slowdown
Britain’s economy performed better than expected in the fourth quarter thanks to the country’s powerhouse services sector, though there are warning signs of “slower and uneven” growth.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.5% in its initial estimate for October to December last year, following growth of 0.4% in the third quarter.
Economists had been expecting growth of 0.4%, according to consensus figures, though a minority had forecast a slowdown to 0.3% on the back of a temporary shutdown of a major North Sea oil pipeline last month.
The biggest impact came from the UK’S services sector – which accounts for around 79% of the economy. Services grew 0.6% quarter on quarter, with business and financial services making the biggest contribution, accounting for work from the likes of lawyers, architects and business administrators.
The ONS said longer-term trends were pointing to a broader slowdown.
ONS head of GDP Darren Morgan said: “Despite a slight uptick in the latest quarter, the underlying picture is of slower and uneven growth across the economy.
“The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management.
“Other services, notably consumer facing sectors, showed much slower growth,” he said, referring to industries such as distribution, hotels, catering, transport and communications.”
The UK economy is still struggling to bounce back to levels seen in the final quarter of 2016 when GDP rose by 0.6%.
Manufacturing growth contributed to a 0.6% rise for production industries over the quarter, but that was partly offset by a “significant” fall in oil and gas extraction following the temporary shuttering of the North Sea Forties pipeline over the bulk of December.
Construction contracted for the third straight quarter – this time by 1%, while agriculture contracted 0.4%.
The ONS said the UK is likely to have seen economic growth of around 1.8% for the whole of 2017.