UK Economy Grew 0.5% in Final Quarter of 2015

While the figures met expectations, Vicky Redwood, chief United Kingdom economist for research firm Capital Economics, warned the 0.5 per cent was “still a bit below the economy’s probable trend rate, meaning that growth still isn’t strong enough to meet one of Mr Carney’s three conditions for raising interest rates”.

Britain’s gross domestic product, a measure of all goods and services produced in the economy, rose 0.5% between October and December, government statisticians said Thursday, compared with 0.4% growth in the third quarter.

This means GDP growth for 2015 as a whole stood at 2.2pc, which is weaker than 2014’s expansion of 2.9pc.

However, production – which includes manufacturing – decreased by 0.2% while construction output fell by 0.1%.

The annual pace of growth is the slowest for three years but still puts the United Kingdom economy among the fastest growing among the developed nations.

Ben Brettell, senior economist at Hargreaves Lansdown said: ‘Your interpretation of today’s GDP figures will depend on whether you take a “glass half full” or a “glass half empty” view of the United Kingdom economy.

“Despite turbulence in the global economy, Britain is pushing ahead”, he said. Near-zero inflation gives the United Kingdom central bank more time to leave borrowing costs low without fear that a sudden increase in prices would overshoot the BOE’s mandate of 2% annual growth in the medium term.

But he added that while the estimate was based exclusively on the output side of the economy, consumer spending was likely to have made a healthy contribution to growth – although net trade was likely negative again.

The International Monetary Fund forecasts that it will expand 2.2 percent this year, and that the USA will grow 2.6 percent.