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The British economy grew more than expected, updated figures from the UK’s Office for National Statistics (ONS) revealed earlier today.
In its report, ONS showed UK’s gross domestic product increased by 0.3% in 2012 instead of the flat growth previously anticipated backed by a rise in output in the construction industry.
UK’s quarterly performance had been in the negative except during the third quarter when it posted a 1.0% growth, itself a revision from 0.9%, boosted ostensibly by the Olympics and Paralympic Games as well as the Diamond Jubilee.
The momentum was however reversed in the fourth quarter, which contracted by 0.3%, same with the previous estimate, affected by what ONS referred to as a “fallback” from the recently concluded sports events and the drop of oil production from the largest UK North Sea oilfield and weak domestic demand.
Confirming Downgrade
UK’s revised GDP growth, however, is seen by analysts as giving credence to the latest downgrade of the country’s credit rating.
Last week, Moody’s stripped the UK of its AAA rating, a first in over three decades, saying that growth will remain sluggish in the next few years.
Market analysts suggested the report by ONS confirms the economy is fragile, with last year’s overall growth only helped largely by the one-time sporting events and the Queen’s celebration.
In detail, the service and production industries fell by 0.1% from a flat estimate and 1.9% from 1.8%, respectively, during the fourth quarter. In contrast, the construction industry grew by 0.9% compared to the 0.3% earlier reported, whilst household consumption only increased by 0.2% in terms of volume.
However, the data also revealed the UK fared better than the Eurozone and the EU, although it lagged behind the US and Japan during the fourth quarter of 2012.
