Britain staves off stagnation
GROWTH in Britain's economy slowed sharply during the final quarter of 2001 but avoided the stagnation that many had feared. Government statisticians' first stab at estimating gross domestic product between October and December showed the economy expanded by 0.2% compared with 0.5% in the third quarter - the weakest quarterly growth for almost three years.
The annual growth rate fell from 2.2% to 1.8%. For 2001 as a whole, the economy expanded by 2.4%, roughly in line with its long-term growth potential.
The figures back the perception that Britain has been reasonably resilient in the face of the global slowdown.
Manufacturing has been hit hardest and is shrinking at the fastest rate since the early-1990s recession as export business dries up. Estimates of manufacturing's decline during the fourth quarter will be published next month.
But growth in the service sector, accounting for about 70% of the economy, is holding up well. National Statistics said the sector expanded by 0.9% in the fourth quarter against 0.6% in the third.
Most economists are cautiously optimistic that the worst is over and growth will bounce back. The consensus forecast is for 1.9% growth this year, just below Chancellor Gordon Brown's 2% to 2.5% forecast.
