The UK economy unexpectedly grew at the end of last year, new figures reveal, in a boost for embattled Chancellor Rachel Reeves.
Output expanded 0.1 per cent in the final three months of the year, according to the Office for National Statistics (ONS), after GDP rose 0.4 per cent in the month of December.
Economists had expected to see the economy shrink 0.1 per cent with month-on-month growth anticipated to be just 0.1 per cent in December.
“The economy picked up in December after several weak months, meaning, overall, the economy grew a little in the fourth quarter of last year,” ONS Director of Economic Statistics Liz McKeown said.
The figures will be a minor boost for Reeves as she seeks to turn the page on a torrid first six months in power.
Having expanded at a relatively fast pace early last year, the economy has been more or less stagnant since spring.
Measures of corporate and consumer confidence plummeted in the wake of October’s Budget, in which Reeves announced £40bn worth of tax hikes.
Surveys indicate that firms are cutting jobs at the fastest rate since the pandemic in anticipation of the extra payroll costs, which will filter through in April.
The Bank of England halved its forecasts for 2025 last week, pencilling in growth of 0.7 per cent compared to a previous estimate of 1.5 per cent.
Over the past few weeks Reeves has announced a range of measures – such as a third runway at Heathrow and changes to the planning regime – to try and reinvigorate the economy.
More to follow