The British economy grew at its fastest rate since 2007 last year seeing an overall growth of 2.7% in 2014 which was a rise of 1.7% from the year before that.
With the last three months of the year seeing growth of 0.5% the United Kingdom managed to collate an annual growth that is at its fastest rate in seven years despite that 0.5% being lower than the previous three months 0.7%.
Economists and analysts alike had mixed reactions to this slowdown in the final of the quarter of the year with many pointing to the overall growth as a positive but worried about the implications of the stuttering final quarter. Joe Grice, the Chief Economists for the Office of National Statistics (ONS), where the figures on growth came from, thought it might be too early to comment on the implications on the loss of momentum saying:
“The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic.”
Howard Archer, chief UK economist at IHS Global Insight said of the figures:
“The main disappointment with growth in the fourth quarter was that it looks unbalanced on the output side of the economy at least.”
The services sector continued to grow during this slow down with a rise of 0.8% but the problem areas appeared to be construction, which contracted 1.8%, and manufacturing, which grew but only at 0.1%. However, these figures are just the first estimate of the final quarter of growth and economists from Centre for Economics and Business Research (CEBR) said of them:
“[we] wouldn’t be surprised if the ONS figures are revised up over time, painting a stronger picture for economic performance at the end of the year”.
These final year figures show that the United Kingdom was one of the best performing economies in 2014 with it being the most attractive place in the Eurozone to outside investors for the year.
On the back of these figures, Britain is expected to see even greater growth in 2015 as the International Monetary Fund (IMF) forecasts UK growth of 2.7% and Samuel Tombs, of consultancy Capital Economics, predicting even higher growth at a rate of 3% going on to say:
“With the recent halving of oil prices providing a timely boost to households’ discretionary spending power, credit still becoming cheaper and pay growth on an improving trend… the best days of the UK’s recovery may still lie ahead.”
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