Growth Outlook for This Year Revised Down from 1.5% to 0.75%
Negative Factors Persist Despite Recent Growth
Contrary to market expectations, the UK economy showed a surprising growth.
The UK Office for National Statistics (ONS) announced on the 12th (local time) that the UK's GDP in the fourth quarter of last year increased by 0.1% compared to the previous quarter. This result contrasts with market forecasts that predicted a 0.1% decline in GDP.
The growth was driven by strong performance in the services and construction sectors, with the economy growing 0.4% in December last year.
The UK's annual economic growth rate last year was 0.9%, higher than the previous year's 0.4%. However, due to population growth, GDP per capita decreased by 0.1%.
The growth rate for the first quarter of last year was 0.8%, 0.1 percentage points higher than previously estimated, while the second and third quarters were 0.4% and 0.0%, respectively, matching earlier estimates.
Although the fourth-quarter growth alleviated immediate recession concerns, interpretations suggest that the trend of slowing economic growth has not disappeared. Recently, the Bank of England (BOE) lowered its economic growth forecast for this year from 1.5% to 0.75%. Businesses continue to express concerns over the Labour government's tax increases, weakening European demand, rising energy costs, and threats of US tariffs.
Sam Miley, an economist at the Centre for Economics and Business Research (CEBR), told The Guardian, "While this is good news, the modest growth rate reflects a weak economic trajectory that is expected to continue this year," adding, "The two consecutive years of decline in GDP per capita also indicate a drop in living standards."
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