View more on these topics

UK GDP revised up but current account deficit widens


The UK economy ended 2015 with a better-than-estimated outlook, the latest data from the Office for National Statistics indicates.

GDP figures show the country grew by 0.6 per cent in the fourth quarter of 2015 instead of the 0.5 per cent reported last month, the ONS says.

The growth was dependent on the services sector on the output side as well as on consumer spending on the expenditure side.

Services grew 0.8 per cent while industrial output fell 0.4 per cent. In January alone, services grew 0.2 per cent.

In the latest Government Budget, the Office for Budget Responsibility slashed its forecast for UK GDP growth in 2016 to 2 per cent.

Earlier in March, the British Chambers of Commerce also downgraded its growth forecast for the UK economy from 2.5 per cent to 2.2 per cent.

Current account deficit widens

Separate figures from the ONS also show the UK current account deficit widened to a record high of £32.7bn in the fourth quarter of last year. This was largely due to a trade deficit and an increase in the shortfall on investment income, the ONS says.

Business investment slumped 2 per cent and exports were almost stagnant with net trade dropping 0.3 percentage points to -0.4 per cent.

IHS Global Insight chief economist Howard Archer calls the new figures “truly horrible” and says the sharp widening in the current account deficit is “a particularly uncomfortable development for the UK economy”.

He says: “While the markets have so far taken a relatively relaxed view of the UK’s elevated current account deficits, it could become an increasing problem if the markets lose confidence in the UK economy for any reason – especially given the size of the fourth quarter 2015 shortfall.

“This would make it harder for the UK to attract the investment inflows that it needs to finance the current account deficit and could weigh heavily down on sterling.”

Investec Wealth and Investment head of fixed interest Darren Ruane says: “The worsening in the current account deficit in the final quarter of 2015 to the equivalent of 7 per cent GDP is concerning ahead of the vote, suggesting the economy continues to be unhealthily dependent on the goodwill of foreigners.

“Furthermore growth is seemingly being propped up by the services sector, with manufacturing activity contracting by 0.3 per cent in 2015.”


Loney-Phil-Royal London-2013

Royal London profits up as pension sales rocket

Royal London’s pre-tax profits rose 11 per cent last year as life and pensions sales rocketed. The mutual’s annual results, published this morning, reveal operating profits – excluding exceptional items – increased from £220m in 2014 to £244m last year. Life and pensions sales rose 40 per cent, from £4.8bn to £6.8bn. Advised pensions sales […]


MPs re-open auto-enrolment probe over Lifetime Isa fears

Parliament’s Work and Pensions committee is to re-open its investigation into automatic enrolment amid fears the new Lifetime Isa could undermine the reforms. The committee first revealed plans to look into auto-enrolment in December last year, with a specific intention to probe its effectiveness and lessons learned since the reforms were launched in October 2012. […]

FCA interior logo 620x430

Providers back FCA action over flawed retirement defaults

Providers are backing calls for the FCA and the Government to give firms safe harbour to move customers out of legacy products with out-of-date default investment strategies. A report published by Standard Life’s independent governance committee earlier this week revealed the insurer wants to move customers out of historical default strategies but is being prevented […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. GDP is all very well, but productivity is core and ours is lousy.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm