UK economy grows 0.5 per cent

According to figures from the Office for National Statistics (ONS), the UK economy has grown 0.5 per cent in the last quarter of 2015, taking the years rate of growth to 2.2 per cent.

The fourth quarter’s figure shows a 0.4 per cent increase on the third quarter’s progress, however the overall growth of 2.2 per cent was less that the 2.9 per cent rate in 2014.

The figure is also in line with the International Monetary Fund’s (IMF) prediction, which forecasted the UK’s economy to grow by 2.2 per cent both in 2015 and for the next two years. However, the IMF also added that the previous years’ robust growth would not return until the global economy regained its strength.

Chris Williamson from research firm Markit, said: "Uncertainty over 'Brexit', weak overseas growth and financial market volatility are all creating an unsettling business environment and point to downside risks to the economy in 2016.

"The coming year could easily see the pace of economic growth slow further from last year's 2.2 per cent expansion, and the chances are growing that we will see yet another year in which interest rates are left at their record low of 0.5 per cent.”

The news comes after figures for November showed the UK’s industrial output had suffered its sharpest decline since 2013, with the Chancellor George Osborne warning that the slowing global economy placed the UK under a ‘cocktail’ of serious threats.

Ben Brettell, senior economist at Hargreaves Lansdown, argued: "The bigger picture is that growth remains lacklustre, but reasonably resilient. Weaker construction and production output are the primary reasons for the slowdown, which could prompt concerns that the UK economy's reliance on the services sector is increasing further.

"Production output declined 0.2 per cent in the fourth quarter and construction was down by 0.1 per cent, whereas the dominant services sector grew by 0.7 per cent.”