Britain's economy grew slightly slower last year than previously estimated, the ONS said, as it confirmed Q4 growth at 0.7%
Britain's economy grew at a slightly slower rate than previously thought in 2013, but economists welcomed signs that growth was more balanced in the final three months of the year.
Gross domestic product increased by 1.8% last year compared with an earlier estimate of 1.9% after growth in both the first and second quarters was revised down by 0.1 percentage points by the Office for National Statistics. However it was still the strongest annual rate of growth since 2007, when the economy grew by 3.4% before the financial crisis.
On a quarterly basis, the ONS confirmed the economy grew by 0.7% in the fourth quarter, unchanged from its first estimate published last month. Details showed a lesser dependence on consumer spending than previous quarters, which, combined with a rise in exports and business investment, was good news for UK policymakers seeking a move away from a economy reliant on debt-fuelled household spending.
David Cameron said it was "more encouraging news" that the government's long-term economic plan was working.
Howard Archer, chief economist at IHS Global Insight, said the breakdown was "encouraging", with business investment up 2.4% in the fourth quarter compared with the third, and up 8.5% compared with a year earlier.
He added: "The critical question going forward is can the economy build on the more broad-based growth seen in the fourth quarter of 2013?"
Consumer spending grew by 0.4% in the final three months of the year, which was slower than the 0.9% growth in the third quarter. However, with annual growth in consumer spending of 2.4%, it was still the fastest rate of growth since 2007.
Britain's trade position improved in the fourth quarter with the trade deficit narrowing to £6.6bn from £8.2bn in the third quarter after exports rose 0.4% but imports fell 0.9%. Over 2013 as a whole export growth of 0.8% outpaced a 0.4% growth in imports.
On the output side of the economy, industrial production was revised down to 0.5% growth in the fourth quarter from an earlier estimate of 0.7%. It was dragged lower by the manufacturing sector – where output rose by 0.7% and not by 0.9% as originally estimated – and by mining and quarrying output which shrank by 1.9%.
However there was better news from the construction sector, with fourth quarter output revised up to show growth of 0.2%, rather than the 0.3% fall in last month's estimate.
The services sector, which accounts for more than three quarters of Britain's economy, was confirmed at 0.8% growth.
The only "top level" industry to suffer was agriculture, forestry and fishing, where output fell by 0.1%, revised down from a previously estimated 0.5% increase.
Chris Williamson, chief economist at Markit, said the latest data boded well for the economy in 2014 but much was dependent on further improvement in businesses investment.
He said: "Key to the improved performance of the economy is whether companies will unleash their pent-up cash reserves and embark on a long-awaited investment spree. Economic uncertainty and credit constraints have discouraged investment and expansion since the financial crisis struck, but the improved outlook at home and abroad means the environment is now more conducive to investment and risk taking."
Earlier this month the Bank of England sharply upgraded its 2014 growth forecast to 3.4% from a November forecast of 2.8%.
The Bank is pencilling in a big surge in both business and housing investment of 11.5% and 23% respectively this year. Consumers are expected to run down their savings to compensate for another year of weak earnings growth.
Spencer Dale, the Bank's chief economist and a member of its monetary policy committee, said on Wednesday that expectations that the first rise in UK interest rates would come in spring 2015 were reasonable.
He told BBC Radio 5 that market expectations of rates "remaining on hold until about the spring of next year and then rising to around 2% by the end of 2016 and on that forecast, on that basis, we have a forecast in which the economy looks pretty good. Based on what we know now, that profile for interest rates looks reasonable." Reported by guardian.co.uk 17 minutes ago.
Britain's economy grew at a slightly slower rate than previously thought in 2013, but economists welcomed signs that growth was more balanced in the final three months of the year.
Gross domestic product increased by 1.8% last year compared with an earlier estimate of 1.9% after growth in both the first and second quarters was revised down by 0.1 percentage points by the Office for National Statistics. However it was still the strongest annual rate of growth since 2007, when the economy grew by 3.4% before the financial crisis.
On a quarterly basis, the ONS confirmed the economy grew by 0.7% in the fourth quarter, unchanged from its first estimate published last month. Details showed a lesser dependence on consumer spending than previous quarters, which, combined with a rise in exports and business investment, was good news for UK policymakers seeking a move away from a economy reliant on debt-fuelled household spending.
David Cameron said it was "more encouraging news" that the government's long-term economic plan was working.
Howard Archer, chief economist at IHS Global Insight, said the breakdown was "encouraging", with business investment up 2.4% in the fourth quarter compared with the third, and up 8.5% compared with a year earlier.
He added: "The critical question going forward is can the economy build on the more broad-based growth seen in the fourth quarter of 2013?"
Consumer spending grew by 0.4% in the final three months of the year, which was slower than the 0.9% growth in the third quarter. However, with annual growth in consumer spending of 2.4%, it was still the fastest rate of growth since 2007.
Britain's trade position improved in the fourth quarter with the trade deficit narrowing to £6.6bn from £8.2bn in the third quarter after exports rose 0.4% but imports fell 0.9%. Over 2013 as a whole export growth of 0.8% outpaced a 0.4% growth in imports.
On the output side of the economy, industrial production was revised down to 0.5% growth in the fourth quarter from an earlier estimate of 0.7%. It was dragged lower by the manufacturing sector – where output rose by 0.7% and not by 0.9% as originally estimated – and by mining and quarrying output which shrank by 1.9%.
However there was better news from the construction sector, with fourth quarter output revised up to show growth of 0.2%, rather than the 0.3% fall in last month's estimate.
The services sector, which accounts for more than three quarters of Britain's economy, was confirmed at 0.8% growth.
The only "top level" industry to suffer was agriculture, forestry and fishing, where output fell by 0.1%, revised down from a previously estimated 0.5% increase.
Chris Williamson, chief economist at Markit, said the latest data boded well for the economy in 2014 but much was dependent on further improvement in businesses investment.
He said: "Key to the improved performance of the economy is whether companies will unleash their pent-up cash reserves and embark on a long-awaited investment spree. Economic uncertainty and credit constraints have discouraged investment and expansion since the financial crisis struck, but the improved outlook at home and abroad means the environment is now more conducive to investment and risk taking."
Earlier this month the Bank of England sharply upgraded its 2014 growth forecast to 3.4% from a November forecast of 2.8%.
The Bank is pencilling in a big surge in both business and housing investment of 11.5% and 23% respectively this year. Consumers are expected to run down their savings to compensate for another year of weak earnings growth.
Spencer Dale, the Bank's chief economist and a member of its monetary policy committee, said on Wednesday that expectations that the first rise in UK interest rates would come in spring 2015 were reasonable.
He told BBC Radio 5 that market expectations of rates "remaining on hold until about the spring of next year and then rising to around 2% by the end of 2016 and on that forecast, on that basis, we have a forecast in which the economy looks pretty good. Based on what we know now, that profile for interest rates looks reasonable." Reported by guardian.co.uk 17 minutes ago.