At last, business investment is picking up
Business investment picked up in the first quarter of the year, accounting for half of the economy's growth, the Office for National Statistics said yesterday.
In a hopeful sign for economic rebalancing, the ONS reported that investment by firms jumped by 5 per cent in the first quarter, up from its previous estimate of a 2.7 per cent expansion and the quickest rate recorded since early 2012.
"This not only indicates that growth is becoming less centred on consumer spending but could also have positive implications for future productivity growth," said Howard Archer of IHS Global Insight.
Business spending accounted for half of the overall 0.8 per cent GDP growth over the period. Some economists had expected growth to be revised up by stronger than expected construction growth but this was offset by a downward revision to the output from the dominant services sector.
In another tentative sign of rebalancing, the current account deficit in the first quarter shrank to £18.5bn, down from £23.5bn in the final quarter of 2013 – a drop from 5.7 per cent to 4.4 per cent of GDP with the ONS reporting that the improvement was driven by a lower trade deficit and a smaller shortfall in net investment and transfers income.
The growth uplift from business investment spending was cancelled out by firms' running down the inventories, which meant the overall GDP expansion was again heavily supported by household spending. According to the ONS the household savings ratio ticked up slightly to 4.9 per cent from 4.8 per cent in the final quarter of 2013.
- 1 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 2 The confessions of men who ordered mail-order brides
- 3 UK weather: Britain braced for snow as arctic air mass moves in
- 4 Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
- 5 'Isis' schoolgirls: Missing British teenager tweets picture of her Syrian takeaway
Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
UK weather: Britain braced for snow as arctic air mass moves in
Power of Nepal earthquake was equivalent to 20 huge atomic bombs
Nepal earthquake video: Terrifying footage shows moment avalanche hit Everest Base Camp
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...
£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...