HOUSEHOLD spending drove UK growth in the fourth quarter of last year as business investment tumbled, the latest official figures have shown.
The figures, published by the Office for National Statistics, highlight the continuing unbalanced nature of UK growth.
Expansion remained stuck well below the UK’s long-term average rate in the fourth quarter, with UK gross domestic product growth over this period confirmed at 0.5 per cent by the ONS in the latest figures.
The statistics show that UK household spending increased by 0.7 per cent in the fourth quarter. Business investment tumbled by 2.1 per cent – its steepest quarterly decline since the opening three months of 2014.
Chris Williamson, chief economist at financial information company Markit, said: “The data paint a picture of an unbalanced economy that is once again reliant on consumer spending to drive growth as business shows increased signs of risk aversion.”
He added: “For a sustainable recovery, which involves improvements in productivity and profits, we also need to see business investment revive, something which will only happen when business confidence lifts higher again.”
Vicky Redwood, chief UK economist at consultancy Capital Economics, said: “The expenditure breakdown wasn’t that encouraging, showing that the recovery
remains heavily dependent on consumer spending. Net trade dragged on growth and business investment fell by a sharp 2.1 per cent, with an especially big fall in the transport sector.”
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