UK GDP growth revised down

The UK economy fared worse in the fourth quarter of 2011 than previously estimated, according to the Office for National Statistics.

The economy was previously thought to have contracted by 0.2% during the final three months of 2011 but the latest quarterly national accounts show that the decrease was actually 0.3%.

Year-on-year growth was revised down to 0.5% from 0.7% the previous year.

Output of the production industries fell by 1.3%, while manufacturing fell by 0.7%.

Jeremy Cook, chief economist at World First foreign exchange, says this latest revsion represents a “slight blip”: “Growth has been revised lower on services numbers and this means that we must be slightly more circumspect when looking at Q1, given increases in energy prices and the likely dampening effect that this will have on household spending.

“Even though this figure has been revised lower, we do however believe that we can now attribute this to being a slight blip. Business surveys such as the recent Purchasing Manager surveys have shown that Q1 should be growing at around a 0.3/0.4% pace, although we would like to see more in the form of business investment, which fell in Q4 by 3.3%. Hopefully the recent Budget will give that a prod in the right direction.

“The UK growth profile looks to continue to “bump along the bottom” in 2012 .”