The UK’s companies sector boosted GDP within the last quarter, seeing a elevate from human well being actions and social work. The development business additionally contributed positively to GDP in the course of the fourth quarter of 2024.
The British financial system grew by 1.1% on an annual foundation in 2024, an upward revision from a earlier estimate of 0.9%, the Workplace for Nationwide Statistics stated on Friday. That’s in comparison with a complete of 0.4% seen in 2023.
Within the last quarter of final 12 months, the financial system expanded by 0.1% on a quarterly foundation, reconfirming first estimates. This was according to market expectations, in addition to being a step up from the third quarter’s flat studying.
The companies sector superior 0.1% within the fourth quarter, which was revised down from 0.2% within the first estimate. The largest contributions got here from social work and human well being actions.
Development additionally rose 0.3%, whereas manufacturing was revised downwards from a fall of 0.8%, to a drop of 0.4% within the last estimate.
This was primarily due to falling metallic merchandise and primary metals manufacturing, in addition to declining transport tools manufacturing.
Web commerce dropped as effectively within the last three months of 2024, together with gross mounted capital formation—that means funding in mounted capital property. Losses had been offset marginally by a big rise in gross capital formation, a broader funding class.
Family consumption additionally grew 0.1% within the fourth quarter, revised up from the flat studying recorded within the first estimate. This was primarily due to extra spending on accommodations and eating places, in addition to housing. Actual authorities consumption expenditure elevated 0.5% too, with extra money going in the direction of defence and public administration.
The UK financial system grew 1.5% year-on-year in actual phrases within the last quarter of 2024, which was forward of 1.4% within the first estimate. It was additionally the strongest yearly development price in two years.
This was primarily attributable to increased authorities spending, in addition to mounted funding and enterprise funding numbers, though family consumption fell barely.
What’s forward for the UK financial system?
Though development within the fourth quarter of 2024 was marginal and nonetheless lingered uncomfortably near a contraction, it was a small dose of fine information for traders. Nevertheless, considerations stay, as escalating geopolitical tensions may nonetheless impression client sentiment within the coming months.
“A leap in retail gross sales in February and affirmation the UK financial system managed to develop within the last quarter of 2024 had been handled as small wins by the market. Whereas not earth-shattering information, traders are taking any nuggets of fine information they will get within the present fragile atmosphere,” stated Russ Mould, funding director at AJ Bell.
Pantheon Macroeconomics stated in an electronic mail word: “Official development information proceed to point out that Funds tax hikes and international uncertainty attributable to President Trump dragged the UK near stagnation within the second half of final 12 months. Customers reined again spending as they anxious about tax hikes in October.”
British impartial fiscal watchdog, the Workplace for Funds Accountability, halved its 2025 development forecast for the UK earlier this week—introduced as Chancellor Rachel Reeves delivered her Spring Assertion.