UK annual growth downgraded to 1.7% - ONS

Friday 28 March 2014 12.00
UK economic growth for last year revised down to 1.7% from 1.8%
UK economic growth for last year revised down to 1.7% from 1.8%

Britain's economy expanded by 1.7% last year, down slightly from a previous estimate, but was still the strongest growth since before the financial crisis, official data showed today.

Gross domestic product for 2013 was down from a previous estimate of 1.8%, the Office for National Statistics said in a statement.

GDP grew by an unrevised 0.7% in the fourth quarter of 2013 compared with activity in the previous three month period, the ONS added.

Exports counted for more of the economy's growth between October and December than previously thought and strong growth in business investment was confirmed.              

But a fall in household incomes - down 0.1% from the third quarter - and a decline in the savings ratio to 5% from 5.6% raised concerns about how long the recovery could last.

The ONS also said Britain's dominant services sector got off to a solid start in 2014, growing 0.4% in January, picking up a bit of speed from December.

Data from the ONS ealier this week showed that UK retail sales rose by more than expected in February, another sign of continued momentum in Britain's economy at the start of theyear.
              
And a separate survey published earlier today showed British consumer sentiment rose in March to its highest levelsince around the start of the financial crisis in 2007.
            
But despite Britain's stronger than expected recovery, total output in the fourth quarter was still 1.4% below the pre-financial crisis peak in early 2008 - a weaker situation than in almost all other big advanced economies.

UK finance minister George Osborne had said last week in the UK budget that the country's economy is predicted to grow faster than expected in the run-up to next year's general election.

Chancellor of the Exchequer Osborne raised his 2014 and 2015 economic growth forecasts and cut his borrowing targets, but vowed to maintain austerity.

Osborne warned the recovery would be jeopardised if the government pulled away from deep spending cuts, which are aimed at eliminating the huge deficit inherited from the previous government in 2010.

GDP was set to grow 2.7% in 2014, up from the previous forecast for expansion of 2.4%, Osborne said. The economy was then predicted to expand by 2.3% in 2015, upgraded from the previous growth estimate of 2.2%.