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UK economy growth fastest in 7 years

January 27, 2015

Official government data show the UK's economy expanded at its fastest pace last year since 2007. But with a slowdown in the fourth quarter, analysts wonder if recovery is really on the horizon.

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Oxfordstrasse in London
Image: picture-alliance/dpa

Britain's economy last year grew at its fastest annual rate since 2007, despite slowing down more than expected in the fourth quarter, official government data showed on Tuesday.

In 2014 the country's gross domestic product (GDP) expanded by 2.6 percent, the Office for National Statistics (ONS) said, up from 1.7 percent in 2013 and in the running to have been the world's fastest-growing major advanced economy last year. But the title needs to be confirmed in the coming weeks, since most countries have not yet reported their 2014 GDP data.

News of the growth comes despite a disappointing slowdown in the fourth quarter, as output only rose by 0.5 percent in the October to December period.

ONS Chief Economist Joe Grice said it was "too early to say" if this slowdown would persist.

"The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply, which can be erratic," he said. The retail sector, in particular, has been driving growth, showing how much the British economy still relies on consumer spending.

But Chancellor George Osborne said the figures showed economic recovery was "on track" despite a worsening international climate.

The latest statistics offer mixed signals ahead of May's national elections, with many pointing out that wage growth is not keeping up with inflation, therefore dampening any recovery.

el/ng (Reuters, AFP)