UK Q4 GDP revised up, recession avoided
By Michele Maatouk
Date: Friday 31 Mar 2023
(Sharecast News) - The UK economy grew a touch in the final quarter of last year, according to figures released on Friday by the Office for National Statistics, meaning a recession was avoided in the second half.
The GDP figure was revised up from an initial estimate of zero growth to 0.1% growth, following an upwardly-revised 0.1% contraction in the third quarter. The initial estimate had shown a 0.2% contraction in Q3.
GDP for 2022 as a whole is now estimated to have risen by 4.1%, up from a previous estimate of 4%.
The figures showed the quarterly GDP in Q4 was 0.6% below where it was pre-Covid in the fourth quarter of 2019, revised upwards from a previous estimate of 0.8% below.
Darren Morgan, director of economic statistics at the ONS, said: "The economy performed a little more strongly in the latter half of last year than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought in the latest quarter.
"Households saved more in the last quarter, with their finances boosted by the government's energy bill support scheme.
"Meanwhile, the UK's balance of payments deficit with the rest of the World narrowed, driven by increased foreign earnings by UK companies, particularly in the energy sector."
Ruth Gregory, deputy chief UK economist at Capital Economics, said: "Overall, today's figures suggests households have slightly larger buffer than we had expected to cope with rising interest rates.
"But with the stock of households' savings now below the pre-pandemic trend in real terms, we still think that savings will be less powerful this year. And with around two-thirds of the drag on real activity from the rising interest rates from 0.10% to 4.25% has yet to be felt, the figures do not change our view that the economy will slip into recession involving a peak to trough fall in real GDP of about 1.0%."
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