UK economy contracted by 0.3 per cent at end of 2012

City A.M. Reporter

The UK economy contracted by 0.3 per cent in the final quarter of 2012 as originally estimated, according to the Office for National Statistics official estimate out today.

Annual growth for 2012 was revised up to 0.3 per cent, up from the original flat estimate, the ONS said.

The Office for Budget Responsibility initially forecast the UK economy would expand by 2.8 per cent last year.

Last week, rating agency Moody's downgraded Britain's triple-A credit rating, citing weak growth that was pushing further back the government's fiscal targets.

Consumer spending ticked up 0.2 per cent on the quarter, while exports fell 1.5 per cent and imports dropped 1.2 per cent.

Output in Britain's service sector – which makes up more than three quarters of GDP – dipped 0.1 per cent in the fourth quarter after growing 1.2 per cent in the third quarter.

Industrial output was 1.9 per cent lower, the steepest fall since the first quarter of 2009. Construction – which accounts for less than seven percent of GDP – expanded by 0.9 per cent, the fastest rate of growth since the second quarter of 2011.