-Joe Grice, ONS Chief Economist
The British economy grew faster than previously thought in the first quarter of the year, as household's disposable income increased at the fastest annual rate since 2011. The economy expanded 0.4% in the first three months, according to the Office for National Statistics, up from an initial estimate of 0.3%. Most economists and the Bank of England expect growth to accelerate later this year. The ONS also revised up an annual growth to 2.9% from 2.5%. For 2014 as a whole, the UK economy grew 3.0%, the fastest pace since 2006. The upward revision to Britain's economic output was largely due to methodological changes in construction. Yet, the largest upward driver was household consumption, which rose 0.9% in the three months through March, marking the 15th straight quarter of positive growth. Meanwhile, quarterly growth in services output was kept unrevised at 0.4%.
A separate report showed the UK's current account deficit shrank less than expected in the first quarter. The British current account recorded a seasonally adjusted shortfall of 26.5 billion pounds in the first three months, narrowing from a deficit of 28.9 billion pounds in the previous quarter. Economists, however, had expected the current account gap to contract to 23.8 billion pounds.
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