According to a recent Office for National Statistics (ONS) report, the British economy expanded by 2.7 percent in 2014. This represents an increase from the previous year by 1.8 percent, and the fastest rate in nearly 8-years.
The final quarter of the year contributed 0.6 percent growth revealed the report, which was released last Tuesday. Q3 outperformed the final quarter of the year by 0.2 percent.
Although economists were generally encouraged by the report, many were slightly concerned over the slowdown towards the end of the year and whether this would continue into 2015.
Manufacturing in particular was a poor performer with just 0.2 percent growth overall, its worst figure for over a year, while the service industry jumped 0.9 percent and construction shrank 1.9 percent.
IHS Global Insight head analyst Howard Archer commented, “Q4 growth seemed slightly unbalanced on the production side of the scales, I’d say that’s the most disappointing aspect of the ONS report.”
George Osborne, Chancellor of the Exchequer, was upbeat regarding the report despite last quarter losses. He said that under an increasingly “volatile international economic climate” the UK statistics are “tremendously encouraging” and described the British economy as “running along as planned”.
Predictably, the shadow chancellor Ed Balls weighed in with a more concerned viewpoint, saying the slowdown in the last quarter was a “dangerous sign of things to come” and that “the Tories are confronting the issue in the usual half-hearted manner”.
The government hit back saying the OND report is subject to revisions depending on further economic data and is only a first estimate of fourth quarter growth. Indeed, experts at the Centre for Economics and Business Research (CEBR) said the UK economy could be much better than the ONS portrays and expect the figures to be revised up in the near future.
The figures regarding construction looked especially out of place, the CEBR said, and the whole picture might look different once more precise data comes in towards the end of this month.
Foreign investments into the UK look sturdy and a recent report by leading investment and trading firm CITIC Tokyo International made it clear Q4 figures would not deter Japanese companies from forging ahead with investment plans in Britain.
The ONS data suggests that Britain is one of the standout performers among the major global economies last year, with the IMF currently forecasting only 2.3 percent growth for the United States, who will release their official figures next Monday.
