The UK economy unexpectedly grew by 0.1% in the final three months of last year, driven by a strong performance in the construction and services sectors, according to official figures.
Analysts had predicted a contraction for the October to December period, but various industries, including pubs, bars, and machinery manufacturers, experienced a particularly strong December, contributing to the growth.
Despite this positive development, the figures also revealed that average living standards in 2023 were slightly lower compared to the previous year.
Looking ahead, concerns persist about the economy's future trajectory. With tax increases set to take effect in April, growth may remain sluggish. Businesses have voiced apprehension over rising National Insurance contributions, higher minimum wages, and reduced business rates relief. These factors are expected to leave employers with less financial flexibility for pay raises and job creation.
The Bank of England has responded to these concerns by halving its growth forecast for the UK this year. It has warned that increased costs could dampen hiring, profits, and investment, potentially pushing prices upward. In a bid to support the economy, the central bank recently cut interest rates to 4.5%.
Economic experts are now closely watching how these factors will influence growth in the coming months.
Analysts had predicted a contraction for the October to December period, but various industries, including pubs, bars, and machinery manufacturers, experienced a particularly strong December, contributing to the growth.
Despite this positive development, the figures also revealed that average living standards in 2023 were slightly lower compared to the previous year.
Looking ahead, concerns persist about the economy's future trajectory. With tax increases set to take effect in April, growth may remain sluggish. Businesses have voiced apprehension over rising National Insurance contributions, higher minimum wages, and reduced business rates relief. These factors are expected to leave employers with less financial flexibility for pay raises and job creation.
The Bank of England has responded to these concerns by halving its growth forecast for the UK this year. It has warned that increased costs could dampen hiring, profits, and investment, potentially pushing prices upward. In a bid to support the economy, the central bank recently cut interest rates to 4.5%.
Economic experts are now closely watching how these factors will influence growth in the coming months.
