Easing the risk of a recession, the UK’s economy saw fractional growth in the final quarter of 2024.
According to new figures from the Office for National Statistics (ONS), GDP (gross domestic product), a key measure of economy growth, is estimated to have risen by 0.1% in the October to December period, following no growth in the previous quarter. It beats expectations of a contraction of -0.1%.
Across key sectors, growth in services (0.2%) and construction (0.5%) output led the way, while production fell by 0.8%.
Monthly data, meanwhile, shows GDP expanded 0.4% in December, above expectations of 0.1%, largely because of growth in the service sector.
Responding to the figures, Martin McTague, National Chair of the Federation of Small Businesses (FSB), said: “News that there was a modest up-tick in growth in the weeks running up to Christmas is far preferable to the alternative but flat growth registered across the final quarter will not come as a surprise to many small firms.
“The fall in production in the last quarter shows that evidence of a feel-good factor from the end of last year is sadly lacking, with members telling us they are finding trading conditions difficult, to say the least.
“With tax changes coming up in April, and the looming Employment Rights Bill which is set to put a big dampener on small businesses’ willingness to take on staff, any economic uplift that has been carried over from last year will be a help, but more must be done to offset turbulence.
“The recent cut in the base rate is a good sign, but will not by itself be enough to give small businesses the confidence they need to choose to invest in their operations, which is what is needed for long-term, substantial and sustainable growth in GDP.
“The Government has loudly stated its commitment to growth, which we agree with, but we need to see words turned into actions in the shortest possible timeframe, so that this positive momentum can snowball into a virtuous circle of investment, productivity gains, and greater prosperity in every part of the UK.”
