Britain’s economy grew by 0.1% in the fourth quarter of 2024, in line with economists’ expectations from a Reuters poll, the Office for National Statistics (ONS) confirmed on Friday.
The services sector posted a 0.1% increase in output during the quarter, while construction grew by 0.3%. In contrast, production output fell by 0.4%.
Real annual GDP growth for 2024 has now been revised up to 1.1% from an initial estimate of 0.9%, following a 0.4% increase in 2023, the ONS said.
Real households’ disposable income (RHDI) per head rose by 1.7% in the fourth quarter, accelerating from 0.6% growth in the previous quarter.
The latest data adds to the stagnation concerns as households continue to accumulate cash at record levels.
The household savings ratio climbed from 10.3% to 12% in the final quarter of 2024, marking the highest level outside of the pandemic since 2010, following the financial crisis. Non-pension savings also reached their highest point on record, excluding the COVID period.
Grant Fitzner, chief economist at the ONS, said that the economy “continues to show little growth since last summer.”
GDP per head, a critical measure of living standards, fell by 0.1% between October and December, signaling a technical recession after two consecutive quarters of decline. Growth per head was flat across 2024.
The data comes after the Office for Budget Responsibility (OBR) on Wednesday trimmed its 2025 GDP growth forecast in half, from 2% to 1%. Chancellor Rachel Reeves said last week that “the world has changed,” attributing the weak outlook to global uncertainty and rising borrowing costs.
She reiterated on Wednesday that “the global economy has become more uncertain, bringing insecurity at home.”
Adding to the economic uncertainty, the UK and Europe face further challenges as U.S. President Donald Trump plans to introduce sweeping “reciprocal” tariffs on April 2, which he has dubbed “Liberation Day” for America.
Trump announced 25% tariffs on car imports to the U.S. on Wednesday, dealing a significant blow to British and European exporters.
In a separate report on Friday, the ONS revealed that British retail sales rose by 1% in February, exceeding expectations.
Data from the ONS showed that the volume of goods purchased outperformed economists’ forecasts of a 0.4% decline, according to a Reuters poll. However, the February increase was smaller than the 1.4% gain recorded in January.
In the three months to February, retail sales were up 0.3% compared to the previous three-month period.
The pound briefly strengthened after the positive data against the dollar, rising to $1.2952 by 08:03 GMT.
Source: Investing