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UK economy likely picked up speed in Q4 2015: NIESR

Tuesday, January 12, 2016 - 23:15

[LONDON] Britain's economy probably expanded 0.6 per cent in the last three months of 2015, picking up from a mid-year slowdown and putting growth for the year close to its long-run trend, a think tank said on Tuesday.

The National Institute of Economic and Social Research's forecast was unchanged from last month's estimate of growth in the three months to November.

Gross domestic product grew 0.4 per cent in the third quarter, matching its lowest rate since late 2012, and down from a previous estimate of 0.5 per cent, according to official data.

A poor batch of industrial output data earlier on Tuesday added to doubts that Britain's economy will bounce back from its third quarter slowdown as strongly as hoped by some economists.

NIESR said Britain's economy likely expanded by around 2.2 per cent last year. While slowing sharply from 2014's 2.9 per cent growth, this would keep the economy growing close to its long-run potential rate. "The slowdown in the economy last year was largely due to a sharp moderation in growth of the construction sector and public spending, exacerbated by weaker net trade," Jack Meaning, NIESR research fellow, said. "There is little spare capacity in the economy, and we expect the output gap to continue to close in 2016."

REUTERS