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UK economy improves in fourth quarter, according to ONS

UK economy improves in fourth quarter, according to ONS

The UK economy showed improvement in the three months to December with a growth of 0.5%, according to the Office for National Statistics.

Overall growth in 2015 was 2.2%, a figure that was predicted by the International Monetary Fund (IMF). Whilst the annual growth rate has been slow over the past few years, the UK economy is still one of the fastest growing of the developed nations.

Slow growth

Whilst the IMF has forecasted a similar growth rate for the next two years, there are concerns that “weak overseas growth and financial market volatility” are creating an “unsettling business environment” and could have a negative impact on the UK economy in 2016.

“The coming year could easily see the pace of economic growth slow further from last year's 2.2% expansion, and the chances are growing that we will see yet another year in which interest rates are left at their record low of 0.5%,” said Markit Chief Economist Chris Williamson.

Concerns over the possibility of the UK leaving the EU have also been raised, with Williamson stating that this could also “point to downside risks” to the economy.

Resilient

Hargreaves Lansdown Senior Economist Ben Brettell stated that growth remains “lacklustre” but “reasonably resilient”, adding that weaker construction and production output are the main reasons for growth being slow.

“Production output declined 0.2% in the fourth quarter and construction was down by 0.1%, whereas the dominant services sector grew by 0.7%,” he said.


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