GDP misses: Britain becomes the slowest growing major economy in the world

Services, the dominant sector of the UK economy, accounted for the majority of growth over the data period. Services account for roughly 80% of UK output.

“Services continued to drive growth at the end of 2017, but with a number of consumer-facing industries slowing, as price rises led to household budgets being squeezed,” Darren Morgan, the ONS’ head of GDP said.

“A number of very small revisions to mining, energy generation and services were enough to see a slight downward revision to quarterly growth overall, despite headline services output being unchanged.”

Here’s the ONS’ chart of UK GDP over the longer run:

While the downward revision does not mark a big drop, it is nonetheless significant as it reverses the optimism brought by January’s suggestion that the economy ended 2017 with growing momentum.

It also pushes the UK back to the bottom of the G7 growth tables, making it the slowest growing major economy in the world in 2017. The growth of 1.4% is lower than that of Japan and Italy, the other weakest nations in growth terms last year.

Earlier in February, data from Eurostat, the eurozone’s statistical agency showed the single currency area’s economy growing faster than the UK for the first time since 2010. While Brexit uncertainty drags on the UK, Europe is flourishing following years of recovery from the debt crisis which plagued the Single Currency area from 2011 onwards.

It should be noted that Thursday’s GDP figures could still be revised higher or lower, and reflect a preliminary sample of all the data the ONS collects about the quarter.

UK GDP has now grown in 20 consecutive quarters. The last time UK GDP shrunk over a quarter was in Q4 of 2012 when the economy readjusted following a huge boost from the 2012 Olympic Games in London.