British economy grows at best annual rate since 2007

27th January 2015, Comments 0 comments

Britain's economy grew in 2014 at the fastest annual pace since before the global financial crisis, despite a fourth-quarter slowdown, official data showed Tuesday.

Gross domestic product -- the value of all the goods and services produced in the economy -- expanded by 2.6 percent, the best annual figure since 2007, the Office for National Statistics (ONS) said in a statement.

Economists said the news was a welcome boost to the Conservative-Liberal Democrat coalition government, which faces an election in 100 days' time in May.

Last year's performance marked an acceleration from 1.7-percent growth in 2013 and was in line with market expectations, but undershot the government's official forecast for expansion of 3.0 percent.

British GDP is now 3.4 percent higher than its pre-recession peak at the start of 2008.

On a gloomy note, the ONS added that output rose by just 0.5 percent in the October-December period compared with the previous three months, aided partly by a strong services industry.

That was however the weakest quarterly rate in a year, as activity was weighed down by a construction sector which shrank at the fastest pace for more than two years.

"Today's figures confirm that the recovery is on track and our plan is protecting Britain from the economic storm, with the fastest growth of any major economy in 2014," said Finance Minister George Osborne.

"But the international climate is getting worse, and with 100 days to go until the election now is not the time to abandon that plan and return Britain to economic chaos."

The fourth-quarter growth rate was the lowest level since the same period of 2013, when it stood at 0.4 percent. Expectations had been for 0.6-percent growth.

Output was dented by construction, which contracted by 1.8 percent -- the biggest drop since the second quarter of 2012.

"This is the second consecutive quarter in which the growth rate has fallen but it is too early to say if there is a general slowing-down of the economy," said ONS chief economist Joe Grice.

"The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic."

© 2015 AFP

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