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UK business investment slips as oil prices fall, trade boosts GDP

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British business investment fell at its sharpest rate in nearly six years late last year, after tumbling global oil prices hit the North Sea petroleum industry, but stronger exports helped make economic growth a bit more balanced.

[LONDON] British business investment fell at its sharpest rate in nearly six years late last year, after tumbling global oil prices hit the North Sea petroleum industry, but stronger exports helped make economic growth a bit more balanced.

Gross domestic product between October and December grew by a quarterly 0.5 per cent, data showed, confirming a preliminary reading. That was the slowest growth rate in a year, although there have been signs the economy started 2015 more strongly.

Economists said the second consecutive quarterly fall in business investment raised questions about the recovery.

The 1.4 per cent drop in business investment was the biggest since mid-2009. Economists had expected it to rise slightly. "Business investment needs to revive for the upturn to be truly sustainable," said Chris Williamson, an economist with data firm Markit. "At the moment, the growth outlook appears to be largely reliant on households benefiting from falling prices and higher wages, the latter being far from guaranteed."

Britain's economic growth of 2.6 per cent in 2014 as a whole was the fastest in seven years.

In yearly terms, fourth-quarter growth was confirmed at 2.7 per cent by the Office for National Statistics on Thursday.

REUTERS