25th February 2016
Official numbers have confirmed economic growth in the UK improved in the final three months of 2015, reaching 0.5%, up from 0.4% in the third quarter.
The figures from the Office for National Statistics (ONS) will come as something of a relief to the government, as revisions to construction output and industrial production had raised the possibility that fourth-quarter growth could be revised down.
However this was still below the growth rates prevailing through 2014, with the result that year-on-year growth dipped to 1.9% in the fourth quarter, marking the weakest annual rate of expansion since the first quarter of 2013.
Overall GDP growth came in at 2.2% in 2015, which was down from a nine-year high of 2.9% in 2014.
Howard Archer, chief UK and European economist at IHS Global Insight said he expects GDP growth to be 2.1% in 2016.
He added: “The UK’s expansion is currently being pressurized by heightened global growth concerns and financial market volatility, while there is mounting domestic uncertainty as the referendum on UK membership of the European Union looms on 23 June.
“We assume that reduced uncertainty after a decision to stay in the EU, improved global growth, higher employment and still decent purchasing power will underpin UK GDP growth improving to 2.5% in 2017.”
However he added that were the UK to vote to leave the EU, he would substantially revise down his growth forecasts for the second half of 2016 and for 2017. “Our 2017 growth forecast could well be cut to 1.0-1.5% from 2.5%,” Archer said.
Notably last month, the Chancellor George Osborne said the UK faces a “dangerous cocktail” of threats and that he was worried about a creeping complacency in the national debate about the economy.