Surprising Growth: Britain's Economy Defies Expectations

The UK's economy grew by 0.1% in the last quarter, contrary to forecasts of a decline. Despite this unexpected uptick, challenges persist with stagnant business investment and rising living costs. GDP growth was supported by sectors like services and pharmaceuticals, but government and inventory spending also played a key role.

In an unexpected twist, Britain's economy grew by 0.1% in the final quarter of last year, outperforming the forecasted 0.1% contraction, according to official figures released on Thursday. This growth offers some relief for finance minister Rachel Reeves, although significant challenges remain on the horizon.

Total GDP expanded by 0.9% throughout 2024, but per capita output slightly declined, signaling persistent pressures on living standards and public finances. This economic resilience was attributed to a robust performance by the services sector, including gains seen in wholesale, film distribution, and pharmaceuticals.

Despite these positive figures, business investment saw a significant 3.2% decrease, driven by declines in transport equipment spending. With higher energy prices and looming global trade slowdowns, the outlook remains tough. Finance minister Reeves has pledged to tackle regulatory hurdles to reinvigorate growth, while opposition voices criticize the fall in per capita GDP as indicative of declining living standards.

(With inputs from agencies.)