GDP growth rate slowed in late 2014

THE rate of growth in the economy slowed in the last quarter of 2014 to 0.5%, the Office for National Statistics said today. Overall growth in 2014 was 2.6%.

The estimated figures for the last three months of 2014 showed a 0.2% decline from the previous quarter.

Overall growth in 2014 was 2.6% – the healthiest performance since 2007, but still below a forecast of 3% made by the independent Office for Budget Responsibility last month.

Joe Grice, chief economist at the ONS said growth while “respectable and solid” appeared to have been pegged back in Q4 by a slowdown in the construction and manufacturing sectors.

The service sector continued to lead the way, and grew 0.8% in the period. Since 2008 the service sector is up 7.9%, compared to falls of 7.9% in construction and 10.6% in production.

Rain Newton-Smith, director of economics at  the CBI said: “Today’s figures confirm that growth slowed slightly compared with the previous quarter. Service sector growth remains robust, but manufacturing continues to struggle with weaker export orders, and construction output has fallen in the last three months.

“The UK should benefit from the fillip that quantitative easing will provide to the Eurozone. However, this needs to go hand-in-hand with structural reforms, like making France’s labour market more flexible and greater infrastructure investment in Germany.”

Managing director at Barclays in the North West, Michael Hartig, said: “These official estimates back up what we have already seen in the incomes of our small business customers.

“Last year was the best for small business growth since before 2001 and it’s good to see a strong finish to the year, which is encouraging for businesses to get the head start they need in 2015.”

UK small business annual income growth was 7.4% in 2014 as a whole according to research from Barclays.