The UK economy unexpectedly grew by 0.1 per cent in the fourth quarter, in a modest boost for Labour as it seeks to fulfil its pledges to re-energise the economy.
The GDP figure for the final three months of the year from the Office for National Statistics marked an increase on the zero growth in the quarter that ended in September, but is still consistent with an economy that is struggling to gain momentum.
Economists had forecast a 0.1 per cent fourth-quarter contraction, according to a poll from Reuters.
The pound strengthened after the data release, up 0.5 per cent against the dollar at $1.251.
Chancellor Rachel Reeves has vowed to make growth the government’s chief mission, throwing her support behind projects including a third runway at London’s Heathrow airport and transport links between Oxford and Cambridge.
But the economy has repeatedly disappointed since Labour took power, stagnating in the second half of last year. Real GDP per head is estimated to have fallen by 0.1 per cent in the fourth quarter, the ONS said.
The Office for Budget Responsibility is expected to cut its growth forecasts in the upcoming Spring Statement, hitting tax revenues and adding to the fiscal pressures facing the chancellor.
The fiscal watchdog told Reeves last week that the headroom she previously had against her key budget rule had been wiped out by factors including poor economic data.
Responding to Thursday’s figures, Reeves said: “For too long, politicians have accepted an economy that has failed working people. I won’t. After 14 years of flatlining living standards, we are going further and faster through our Plan for Change to put more money in people’s pockets.”
This is a developing story