UK slowdown was 'worse than expected' in 2010

Latest fourth quarter figures from the Office of National Statistics show a 0.6 per cent drop in GDP

Bad weather took a worse than expected toll on UK gross domestic product (GDP) in the fourth quarter of 2010, according to the Office of National Statistics (ONS).

Its latest figures revealed a 0.6 per cent drop in output, revised down from a decrease of 0.5 per cent published last month.

Breaking down the figures, services output decreased by 0.7 per cent in Q4 2010, compared with an increase of 0.5 per cent in the previous quarter.

Compared with Q4 2009, services output has actually increased by 0.7 per cent. The output of the distribution, hotels and restaurants industries decreased by 0.4 per cent in Q4, compared with an increase of 0.8 per cent in Q3 2010.

Transport, storage and communication output fell by 1.4 per cent in Q4, compared with a rise of 1.5 per cent in the previous quarter.

Business services and finance output decreased by 1.1 per cent, compared with a rise of 0.3 per cent in 2010.

Household expenditure fell 0.1 per cent compared with a rise of 0.1 per cent in Q3 2010.

In its statement, the ONS said: “The change in GDP in Q4 was clearly affected by the extremely bad weather in December. The disruption caused by the bad weather is likely to have contributed approximately 0.5 percentage points of the 0.6 per cent decline.”

However, despite the revision, GDP in Q4 was still 1.5 per cent higher than the same period in 2009, the ONS added.