-Howard Archer, an economist at IHS Global Insight
The British economy grew in the fourth quarter of 2014 in line with expectations, according to the second estimate released by the Office for National Statistics. The UK GDP fell to 0.5% in the reported period, down from 0.7% in the previous three-month period. The second estimate is based on 50%-60% of available data from the expenditure and income side. The final reading is due in late March. The biggest upward catalyst on the output side of GDP was the services sector, increasing 0.8% between the third and fourth quarters. The largest drag on growth came from a weaker construction sector, which plummeted 2.1% between the two quarters. In 2014 as a whole, the UK economic output surged 2.6% from the previous year. The full-year growth reading was also left unrevised.
A separate report showed investment by businesses dropped at the sharpest pace in almost six years in the December quarter, hurt by lower investment in the petroleum sector as global oil prices continued to decline. Business investment fell 1.4% following the 1.2% drop in the third quarter, marking the second quarterly fall in a row. Measured on an annual basis, growth stood at 2.1%, the slowest since early 2010. Economists believed business investment in the UK might also be hit by uncertainty over the outcome of Britain's national elections in May.
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