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UK economy expands 0.5% in fourth quarter UK economy grows 0.5% in fourth quarter
(35 minutes later)
The UK economy grew by 0.5% in the three months to end of December, official figures show, taking the annual rate of growth for 2015 to 2.2%. The UK economy grew by 0.5% in the three months to the end of December, official figures show, taking the annual rate of growth for 2015 to 2.2%.
The Office for National Statistics figures show quarterly growth picked up from the third quarter's rate of 0.4%. The Office for National Statistics show an improvement on the third quarter figure of 0.4%.
But it leaves annual growth down on 2014's growth rate of 2.9%. But the 2.2% annual growth in 2015 was down compared with 2.9% in 2014.
Output in the three months to December was 1.9% higher than a year earlier, down from 2.1% in the third quarter and the smallest increase since early 2013.Output in the three months to December was 1.9% higher than a year earlier, down from 2.1% in the third quarter and the smallest increase since early 2013.
The annual pace of growth may be the slowest for three years, but still means the UK economy is one of the fastest growing developed nations. Despite the annual pace of growth being the slowest for three years, it still means the UK economy is one of the fastest growing developed nations.
The figure is in line with a recent forecast by the International Monetary Fund (IMF), which said the UK's economy would grow by 2.2% in 2015, and for the next two years.The figure is in line with a recent forecast by the International Monetary Fund (IMF), which said the UK's economy would grow by 2.2% in 2015, and for the next two years.
But the IMF also suggested that the robust growth of the past two years would not return until the global economy regained strength.But the IMF also suggested that the robust growth of the past two years would not return until the global economy regained strength.
Chancellor George Osborne closed his 2011 Budget speech by setting out his aspiration for "a Britain carried aloft by the march of the makers".
Part of his vision for the future was an economy with a more prominent role for manufacturing.
How much has changed since then?
Read Andrew Walker in full
'Unsettling''Unsettling'
Chris Williamson from research firm Markit said: "The upturn masks an unbalanced economy and a slowing pace of expansion, with the annual rate of growth slipping to the weakest for almost three years. Chris Williamson from research firm Markit said: "Uncertainty over 'Brexit', weak overseas growth and financial market volatility are all creating an unsettling business environment and point to downside risks to the economy in 2016.
"Uncertainty over 'Brexit', weak overseas growth and financial market volatility are all creating an unsettling business environment and point to downside risks to the economy in 2016.
"The coming year could easily see the pace of economic growth slow further from last year's 2.2% expansion, and the chances are growing that we will see yet another year in which interest rates are left at their record low of 0.5%.""The coming year could easily see the pace of economic growth slow further from last year's 2.2% expansion, and the chances are growing that we will see yet another year in which interest rates are left at their record low of 0.5%."
Earlier this month, figures for November showed that UK industrial output had suffered its sharpest decline since 2013.Earlier this month, figures for November showed that UK industrial output had suffered its sharpest decline since 2013.
The Chancellor, George Osborne, recently warned that the UK was facing a "cocktail" of serious threats from a slowing global economy.The Chancellor, George Osborne, recently warned that the UK was facing a "cocktail" of serious threats from a slowing global economy.
On Thursday, while on a visit to the Airbus plant in Filton, Bristol, the chancellor said: "These GDP numbers show the British economy continues to grow steadily and despite turbulence in the world economy. On Thursday, while on a visit to the Airbus plant in Filton, Bristol, the chancellor said: "These GDP numbers show the British economy continues to grow steadily and despite turbulence in the world economy Britain is pushing ahead."
"Britain is pushing ahead but with what's going on around the world, there may be bumpy times ahead which is why we've got to stick with the economic plan which is reducing our debts and attracting jobs and investment to our country and that is the course we are going to stick to. "
What is the 'cocktail' of financial risks?
Reliance on servicesReliance on services
Ben Brettell, senior economist at Hargreaves Lansdown, said: "Your interpretation of today's GDP figures will depend on whether you take a 'glass half full' or a 'glass half empty' view of the UK economy. The bigger picture is that growth remains lacklustre, but reasonably resilient. Ben Brettell, senior economist at Hargreaves Lansdown, said: "The bigger picture is that growth remains lacklustre, but reasonably resilient.
"Weaker construction and production output are the primary reasons for the slowdown, which could prompt concerns that the UK economy's reliance on the services sector is increasing further."Weaker construction and production output are the primary reasons for the slowdown, which could prompt concerns that the UK economy's reliance on the services sector is increasing further.
"Production output declined 0.2% in the fourth quarter and construction was down by 0.1%, whereas the dominant services sector grew by 0.7%.""Production output declined 0.2% in the fourth quarter and construction was down by 0.1%, whereas the dominant services sector grew by 0.7%."
Last week, the Bank of England governor, Mark Carney, said that he wanted to see above-average growth in the economy and a pick-up in wages before raising interest rates.Last week, the Bank of England governor, Mark Carney, said that he wanted to see above-average growth in the economy and a pick-up in wages before raising interest rates.
Many economists do not expect the central bank to increase rates until the tail end of this year.Many economists do not expect the central bank to increase rates until the tail end of this year.