UK GDP falls 0.5% in fourth quarter

Britain’s output fell 0.5% in the fourth quarter of 2010 and grew less than expected in the third quarter, according to the Office for National Statistics (ONS).

The ONS revised economic growth in the third quarter down from 0.8% to 0.7% while publishing the latest fourth quarter figures, which are much worse than anticipated.

The figures are likely to encourage those who want the Bank of England to keep interest rates on hold so as not to damage Britain’s growth prospects, despite the recent high inflation.

Output growth in the production and service industries was revised down to 0.5% respectively in the third quarter. Construction output growth was also revised down to 3.9% from 4%. (article continues below)

Manufacturing was up 1.1%, but mining was down 1.7% and utilities were down 0.5%.

Inventories rose £300m.

In the fourth quarter, however, construction declined by 3.3%, although total output growth for production rose to 0.9%, while the same figure for manufacturing rose to 1.4%. Mining and quarrying fell 2.5%.

Britain’s trade deficit in real terms remained at £9.7 billion at the end of last year. Exports of goods and services rose 1.5%. Imports rose 1.7%.