London, Feb. 17, 2025 – The UK economy experienced a modest growth in the final three months of 2024, early official figures show, alleviating immediate concerns about a potential recession.
Figures released by the Office for National Statistics (ONS) showed a 0.1% increase in gross domestic product (GDP) for the three-month period ending in December.
The figure was better than analysts’ projections for a 0.1% contraction and leaves Britain officially out of recession, defined as two consecutive three-month periods of declining GDP.
However, this followed a zero-growth reading for the previous three months to September.
While the economy is not in a recession, the threat of a shallow downturn remains, as the thin margin between growth and contraction leaves room for potential downward revisions in future data.
Britain’s services sector grew by 0.2%, while construction expanded by 0.5%. The manufacturing sector contracted, however, with production output down by 0.8%.
In December alone, UK GDP expanded by a faster-than-expected 0.4% — helping the economy to grow in the final quarter of 2024.
ONS director of economic statistics Liz McKeown said: “The economy picked up in December after several weak months, meaning, overall, the economy grew a little in the fourth quarter of last year.
“Across the quarter, growth in services and construction were partially offset by a fall in production. GDP per head, in contrast, fell back slightly in the quarter.
“In December wholesale, film distribution and pubs and bars all had a strong month, as did manufacturing of machinery and the often-erratic pharmaceutical industry. However, these were partially offset by weak months for computer programming, publishing and car sales.”
Real GDP per head – which adjusts for population changes – is estimated to have fallen by 0.1% in the last quarter of 2024, the ONS said.
After the slight growth in Britain’s economy at the end of last year, chancellor Rachel Reeves said: “For too long, politicians have accepted an economy that has failed working people. I won’t.
“That is why we are taking on the blockers to get Britain building again, investing in our roads, rail and energy infrastructure, and removing the barriers that get in the way of businesses who want to expand.”
The chancellor announced last month that the government is backing a third runway at Heathrow in an effort to boost the economy.
The Bank of England’s latest projections delivered a sobering message last week, with inflation expectations for 2025 rising to 3.7%, up from the current 2.5%.
The outlook for growth, meanwhile, was revised sharply downward, with the central bank now predicting a modest 0.75% expansion for the year. This marks a significant downgrade from the 1.5% growth anticipated just three months ago.
The Office for Budget Responsibility (OBR) is expected to cut its growth forecasts in the upcoming spring statement, hitting tax revenues and adding to the fiscal pressures facing the chancellor. (Yahoo Finance)
