Consumer spending in the fourth quarter of 2007 almost ground to a halt, confirming retailers’ worst fears, according to the Office for National Statistics.
The rate of growth slowed to 0.2 per cent, less than a third of the pace of the previous three months and the weakest since autumn 2006.
GDP rose 0.6 per cent in the fourth quarter of last year, compared with 0.7 per cent in the previous quarter. But the fragile state of the economy was emphasised by a massive build-up of stocks on companies’ shelves, the fastest for two decades.
Capital Economics economist Paul Dales said: “The second estimate of Q4 GDP revealed that the strength of the economy towards the end of last year was built on some shaky foundations. As such, it is unlikely to be long before it becomes clear that the UK has entered its weakest period of growth since it left the Exchange Rate Mechanism 15 years ago.”