Official figures showed gross domestic product rose a little more in the fourth quarter of last year rather than 0.1% estimated last month.The upward revision for the fourth quarter was better than revised City forecasts.
The Office for National Statistics said output grew 0.3 per cent in the fourth quarter, not the 0.1 per cent reported in the preliminary estimate. However, gross domestic product growth in the third quarter was weaker than estimates had suggested. The UK economy contracted 5 per cent in 2009, not 4.8 per cent as previously calculated.
The service sector, which accounts for three-quarters of output and includes City firms as well as hotels and restaurants, grew by 0.5% in the fourth quarter, five times faster than previously reported.
Output from industry was lifted from 0.1% to 0.4% with manufacturing registering growth of 0.8% — twice as fast as previously thought.
Household spending rose by 0.4% over the quarter in a sign that record low interest rates and the temporary cut in VAT, which has now been reversed, worked through the economy
Mervyn King, governor of the Bank of England, reinforced his concerns about the UK and global recovery on 23 February, indicating the Bank would resume its purchases of assets if spending and the inflation outlook remained weak.
Mr King was asked at the House of Commons Treasury Select Committee whether more quantitative easing - creating money to buy assets - would be needed, Mr King said: "It may be. We'll have to see how things pan out. My particular concerns at present derive from the state of the world economy."
The Bank published its quarterly inflation report, was of concern from the UK's need to secure growth from investment and net exports rather than household and government consumption.
"Recovery in our largest export market - the euro area - appears to have stalled," he told MPs in his opening remarks.
"To maintain levels of economic activity around the world, high-savings countries must expand their domestic demand while low-savings countries are reducing their net borrowing from abroad. At present, there is little evidence that this is taking place," Mr King said.
So are we in line for a dip or listening to some of my business colleagues a couple of Vs as we lead up to the election in the UK.
