UK economic growth undershot expectations in the final three months of 2014 thanks to a sharp contraction in the construction sector.
The first estimate of fourth quarter growth from the office for national statistics (ONS) was 0.5 per cent on a quarter-on-quarter basis, lower than the 0.7 per cent seen in the third quarter and lower than market expectations.
The ONS said the “erratic” construction sector had contracted by 1.8 per cent compared to the previous quarter, the sharpest drop in output since the second quarter of 2012.
Growth from services and agriculture compensated for the fall in construction, but the production sector also contracted, by 0.1 per cent.
Samuel Tombs, senior UK economist at Capital Economics, said the data showed that the “UK’s economic recovery lost a little pace towards the end of last year”.
But he said the fall in the price of oil should see a return to growth in 2015 and that “the best days of the UK’s recovery may still lie ahead”.
