UK's Q4 2015 economic growth confirmed at 0.5%

Fourth quarter economic growth in the UK was confirmed in February as being 0.5%, helped by steady growth in the services sector, which grew by 0.7% during the period. However, the important production sector (which includes heavy industry and manufacturing) saw a contraction of 0.5%. This contraction together with a decline in overall net trade, countered these results, dragging the final results down.

Overall, therefore, according to the Office for National Statistics (ONS), the UK economy grew by 2.2% through the whole of 2015. Whilst this reflected the smallest growth rate seen since 2012, it should be emphasised that the UK is still one of the most robust and fastest growing economies of the developed nations.

This dichotomy in sector growth was emphasised by the Chancellor of the Exchequer, George Osborne, who in January this year was reported to have said the UK economy was still likely to see a “dangerous cocktail” of economic risks in 2016. These significant challenges include tension in the Middle East, low commodity prices and slowing growth in China, weighing on global confidence.

The fourth quarter of 2015 represented the 12th consecutive quarter of growth here in the UK. Prior to this between 2009 and 2012 the UK showed erratic quarterly growth. This prompted Joe Grice, the Chief Economist of the ONS, to state: “Once again, the buoyancy of the services sector has offset the relative sluggishness of the rest of the UK economy.”

Meanwhile, the International Monetary Fund (IMF), based in Washington, USA and headed by Christine Lagarde, warned that although the UK’s economy has been “strong”, the forthcoming referendum on the UK’s continued membership of the European Union, now scheduled for June 23rd, brought “risk and uncertainty” to the global economy as a whole, which was already “highly vulnerable to adverse shocks.”


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