UK economy grew a provisional 0.9% in Q4

The UK economy grew at its fastest rate for nearly four years during the fourth quarter of 2003, when Gross Domestic Product (GDP) increased 0.9% from the previous quarter, according to preliminary figures from National Statistics.

This was the highest quarterly increase since the first quarter of 2000, and higher than expectations of a 0.8% quarterly increase.

On a year-on-year basis, GDP was 2.5% higher, against expectations of a 2.3% increase.

Today's figures also show that the economy grew at 2.1% for the full year 2003 against 2002 figures, when the economy grew at 1.7%, its slowest rate for ten years.

The main contributor to the growth in the fourth quarter came from the service sector, which expanded by 1.0% in the quarter for a 2.6% year-on-year rise.

The market regarded the positive data as a signpost that interest rates could be increased from their current 3.75% in February by the Bank of England. Sterling gained nearly half a cent against the dollar on the news.