UK economy experienced better than forecast growth in 2012

Press Release   •   Feb 27, 2013 11:59 GMT

The UK economy grew by more than previously thought in 2012, official figures have shown. The Office for National Statistics (ONS) revised its growth estimate for the year up from no growth to 0.2%.

The economy of the United Kingdom is the sixth-largest national economy in the world measured by nominal GDP and eighth-largest measured by purchasing power parity (PPP). The UK's GDP per capita is the 22nd highest in the world in nominal terms and the 22nd highest measured by PPP.

However, the ONS maintained its finding that output fell by 0.3% between October and December. Slow wage growth hitting consumers' pockets was a major factor.

Despite that better than expected scenario for the Chancellor George Osborne ahead of his Budget next month, the fourth quarter's output performance continues to highlight the risk of the UK economy suffering a triple-dip recession.

Last week, ratings agency Moody's downgraded Britain's triple-A credit rating, citing weak growth which it said was damaging the Government's fiscal targets.

According to the ONS output in the service sector, which makes up 75% of the UK economy, fell by 0.1% in the final quarter of 2012.

The revisions earlier in the year came in the first quarter, which was lifted from a 0.2% contraction to a 0.1% contraction while growth in the third quarter was upgraded from 0.9% growth to 1.0%.

The third quarter was boosted by the Olympic Games, with all ticket sales being assumed to have taken place in that three-month period.

Growth in the fourth quarter of 2012 compared with the fourth quarter of 2011 was revised up from zero to 0.3%.

The outlook for the rest of the year is one of very modest economic growth at best with ongoing, heightened risks of another slide back into contraction.

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