UK economy expanded slightly at end of 2022, data shows

The British economy performed slightly better than previously estimated in the final quarter of last year, official figures show.

New numbers from the Office for National Statistics showed on Friday that the UK economy expanded by 0.1 per cent between October and December.

Previous estimates from the ONS said growth had been flat in the final quarter.

Meanwhile, revamped figures from the ONS showed the UK economy shrank by 0.1 per cent in the third quarter, which was a smaller contraction than previously thought.

Under both sets of estimates, the UK narrowly avoided falling into recession at the end of 2022.

“The economy performed a little more strongly than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought,” ONS director of economic statistics Darren Morgan said.

Travel agents fly higher

The UK's services sector expanded by 0.1 per cent, boosted by a 10.8 per cent jump in activity for travel agents.

Manufacturing grew by 0.5 per cent, driven by the pharmaceutical and construction sectors.

Households were able to save more, thanks largely to the government's energy bill support programme. The saving ratio rose to 9.3 per cent of disposable income, compared with 5.6 per cent just before the pandemic.

Households' disposable income increased by 1.3 per cent after four consecutive quarters of negative growth.

Ruth Gregory at Capital Economics said the upward revisions to the GDP figures for the third and fourth quarters showed that high inflation took a slightly smaller toll on the economy than previously thought.

“But with around two thirds of the drag on real activity from higher rates yet to be felt, we still think the economy will slip into a recession this year,” she said.