UK GDP growth fell 0.3% in last quarter

An example of how we often don't really know what is happening in the economy - the estimate for UK GDP growth in the fourth quarter of 2011 has been revised down from -0.2% to -0.3% (according to ONS figures published yesterday).  This was a surprise since survey data had pointed to a more optimistic outcome and some analysts were expecting the estimate to be revised upwards.  It seems a drop in business investment of 3.3% in the quarter was a major contributory factor.  This underlines a fundamental problem with the UK economy at present - business does not seem to be investing as much as it could be.  The Office for Budget Responsibility, in its March Economic and Fiscal Outlook, published with the Budget, stated that it had become more pessimistic about the ability of companies to increase investment significantly, at least in the next year or two.

As far as we can tell, the lack of a convincing commitment to growth by the government is dampening economic confidence.

Stephen Beer, 29/03/2012

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