Consumer spending drove the U.K. economy to a 12th straight quarter of growth as the global slowdown took its toll on exporters and business investment slumped.
Household spending rose 0.7 percent between October and December, helping to counter a second quarter of declining exports and the biggest drop in business investment in almost two years, the Office for National Statistics said on Thursday. The economy grew 0.5 percent, unrevised from an initial estimate.
The figures reinforce the picture of an economy being almost entirely driven by domestic demand a time of deepening troubles in the world economy.
There are concerns that momentum could weaken in the run up to the June 23 referendum on whether Britain should stay in the European Union.
With polls suggesting the outcome is hard to call, sterling plunged this week and Bank of England Governor Mark Carney indicated officials are prepared to loosen monetary policy if needed.
Exports fell 0.1 percent in the fourth quarter, and net trade knocked 0.4 percent point from growth in the period. Business investment dropped 2.1 percent, the biggest fall since the first quarter of 2014, on disposals of transport assets. There were also downward revisions to investment in the first and third quarters of 2015. Government spending rose 0.5
A picture of lopsided growth was reflected in gauges of output. While the dominant services industry expanded an unrevised 0.7 percent, industrial production shrank more than previously estimates with manufacturing stagnating.
The figures come a day before the U.S. publishes revised estimates for the fourth quarter, with economists predicting annualized growth of 0.4 percent — the weakest reading since early 2014 — rather than the initially reported 0.7 percent. Annualized growth in the U.K. was 1.9 percent.
The latest figures also show the compensation of employees, the widest measure of remuneration, rose 0.7 percent in the fourth quarter. GDP per capita — a measure of living standards — climbed 0.3 percent.
While the economy as a whole returned to its pre-recession size in 2013, population growth meant that Britain remained poorer on a per capita measure until last year.