The UK economy expanded more than initially estimated in the fourth quarter, reflecting the revisions across the service sector, data from the Office for National Statistics showed on Thursday.
Gross domestic product grew 1.3 percent sequentially in the fourth quarter, instead of the initial estimate of 1.0 percent. This was also faster than the 0.9 percent rise in the third quarter.
The level of GDP was now 0.1 percent below where it was pre-coronavirus at the fourth quarter of 2019, revised from the previous estimate of 0.4 percent below, the ONS said.
In 2021, the economy grew at the fastest pace since the Second World War. There was a rebound of 7.4 percent in the economy in 2021, following the 9.3 percent contraction in 2020, which reflected the initial impact of the coronavirus pandemic and public health restrictions.
Services output advanced 1.5 percent in the fourth quarter, revised up from a first quarterly estimate of 1.2 percent.
At the same time, production output fell 0.2 percent, despite seeing a slight upward revision from its first quarterly estimate. Meanwhile, construction output grew 1.0 percent.
On the expenditure-side, household expenditure rose 0.5 percent, which was revised down sharply from 1.2 percent.
By contrast, government spending grew 1.5 percent driven by an increase in health spending. However, this was also slower than the previous estimate of 1.9 percent.
Gross fixed capital formation increased by revised 1.1 percent, underpinned by investment in transport equipment and dwellings.
There was a rise of 1.0 percent in business investment in the fourth quarter, which was now 8.6 percent below pre-coronavirus levels.
Excluding the alignment and balancing adjustments, inventories fell by GBP 3.6 billion in the fourth quarter. The trade deficit was 1.0 percent of GDP in the fourth quarter, a narrowing from the 2.8 percent deficit of nominal GDP in the third quarter.
Data showed that the household saving ratio decreased to 6.8 percent compared with 7.5 percent in the third quarter.
The upward revision to GDP growth in the fourth quarter may not be as encouraging as it looks, as a lot of it appears to be due to inventories while consumer spending was revised down, Paul Dales, an economist at Capital Economics, said.
Data suggested the squeeze on real incomes is starting to bite, although the fall in the saving rate is providing a cushion, the economist added.
In a separate communiqu?, the ONS said the current account deficit narrowed to GBP 7.3 billion, or 1.2 percent of GDP in the fourth quarter.