News offers a sliver of relief to Keir Starmer’s government.
The U.K. economy fared marginally better than expected at the end of last year, eking out modest growth thanks to an uptick in industrial output.
The news offers a modicum of relief to a government that has seen growth largely grind to a halt since it took office, with Chancellor Rachel Reeves’ first budget compounding some stiff international headwinds and the lingering effects of high inflation and interest rates.
The Office for National Statistics said gross domestic product grew 0.1 percent in the three months through December, and was up 0.9 percent from a year earlier. Analysts had expected a contraction of 0.1 percent, but the numbers were rescued by a surprisingly strong 0.7 percent rise in manufacturing output in December.
On the downside, business investment fell by 3.2 percent in the quarter, as U.K. plc responded to a steep rise in National Insurance contributions in the budget and the election of Donald Trump as U.S. president in November.
Overall, the ONS indicated that the expansion last year was entirely accounted for by growth in the U.K.’s population. In per capita terms, GDP was down 0.1 percent on the quarter, and down by the same amount across 2024 as a whole.
