The British economy grew less strongly than expected in the fourth quarter of 2004 as consumer spending slowed to its weakest pace in nearly two years, official data showed today.
The Office for National Statistics (ONS) said the economy grew an unrevised 0.7 per cent in the October-to-December period, up from the 0.5 per cent in the third quarter but less than the 0.8 per cent economists had forecast.
However, annual growth was revised up to 2.9 per cent from an initially reported 2.8 per cent, owing to better performance in the production industries, the ONS said.
Quarterly household spending growth slowed in the fourth quarter to just 0.4 per cent, its weakest since the first quarter of 2003 when the run-up to the Iraq war dented consumer sentiment, leading to a 0.2 per cent contraction.
According to the ONS, the slowdown was due to slower spending on durable and semi-durable goods. Annual growth in household spending for the first three-quarters of last year were also revised down by 0.1 percentage point each.
Analysts said that slowdown might be of concern to the Bank of England, which has said it is closely watching household spending figures, although for now it did nothing to deter growing expectations for a rate rise later this year.