The assessments of quarterly growth are always subject to revision since the estimate of GDP is based on a subset of the data. As a more comprehensive picture emerges, the figures are revised, but often the original projection proves to be pretty close to the mark.
The UK electorate will go to the polls in May and current predictions indicate that no one party will have sufficient support to govern alone, so potential coalitions and deal-by-deal support scenarios are being played out in the media. With Britain arguably recovering the most strongly of all of the major economies (well, if we forget about China, of course), all of the parties will be trying to place their own spin on the state of the UK economy.
The ruling Conservative party and their coalition partner, the Liberal Democrats, will therefore be pleased that the Office for National Statistics (ONS) has announced that UK economic growth in the fourth quarter of 2014 was stronger than initial estimates suggested. According to the ONS, growth in Q4 came in at 0.6%, revised upwards from an earlier estimate of 0.5%. This may not sound like much, but one needs to remember the size of the UK economy: British GDP is approximately $2.5 trillion (or roughly £1.6 trillion) and that the UK economy is the fifth largest in the world behind the USA, China, Japan and Germany. On this basis, the increase is worth an additional $2.5 billion (on Q4).
The figure was better than expected largely because export performance beat expectations, but household spending and productivity figures were also higher than anticipated. The annualised growth figure comes in at 2.8% which is the best annual growth seen since 2006. There will be some concern that the strength of the pound relative to the Euro could dampen exports to the Eurozone, our largest trading partner. The pound has appreciated by nearly 7% against the Euro since the start of the year.