UK Q4 GDP Growth Revised Down to 0.4%


The British economy grew by 0.4 percent on quarter in the three months to December of 2017, below the preliminary estimate of 0.5 percent and following an upwardly revised 0.5 percent expansion in the previous period. Production output rose less than initially thought. On the expenditure side, there was a slowdown in growth of household spending and business investment.

From the expenditure side, the largest contribution to growth was from gross capital formation at 0.6 percentage points, followed by household spending at 0.2 percentage points and general government at 0.1 percentage points. Meanwhile, net trade had a negative contribution of 0.5 percentage points.

Gross fixed capital formation grew by 1.1 percent (vs 0.7 percent in Q3), with the general government and private dwelling sectors contributing the most to the increase, while business investment showed no growth (vs 0.9 percent in Q3). Household expenditure advanced by 0.3 percent, following a 0.4 percent rise in Q3, and government spending expanded by 0.6 percent, after being unchanged in the previous period. The largest contributor to this increase in government expenditure was healthcare, followed by spending on public administration and education.

Imports of goods and services went up by 1.5 percent (vs 1 percent in Q3), due in part to large increases in the price of fuels that were imported, while exports decreased by 0.2 percent (vs 0.2 percent in Q3), as sales of fuels fell. As a result, the trade deficit widened by £2.576 billion from the previous period to £12.237 billion.

From the production side, the services aggregate was the main driver of growth, contributing 0.4 percentage points, followed by total production (0.1 percentage points).

The services industries increased by 0.6 percent, faster than 0.4 percent in the previous period. Positive growth was recorded within three of the four sub-sectors of the services industries: transport, storage and communications (1.1 percent vs 0.3 percent in Q3); business services and finance (0.9 percent vs 0.7 percent); and government and other services (0.2 percent vs -0.1 percent). By contrast, distribution, hotels and restaurants contracted by 0.2 percent, after a 0.5 percent growth in Q3. Industrial output increased by 0.5 percent (vs 1.4 percent in Q3), boosted by manufacturing (1.3 percent vs 1.4 percent) while activity in other sub-sectors declined: mining and quarrying (-4.7 percent vs 2.6 percent); electricity, gas, steam and air conditioning supply (-0.5 percent vs 1.7 percent). Water supply and sewerage was unchanged from the previous three-month period (vs -0.4 percent in Q3). Construction output shrank for the third consecutive quarter by 0.7 percent in the fourth quarter (vs -0.3 percent in Q3).


UK Q4 GDP Growth Revised Down to 0.4%


ONS | Joana Ferreira | joana.ferreira@tradingeconomics.com
2/22/2018 10:10:02 AM