The U.K. economy expanded slightly in the fourth quarter, a stronger performance than previously anticipated, though it remains smaller than its size before the pandemic as elevated inflation and high interest rates hit economic activity.
Gross domestic product grew 0.1% from October to December compared with the previous three-month period, in comparison with the stagnation previously estimated in February, according to data from the Office for National Statistics released Friday.
Economists polled by the Wall Street Journal also expected stagnation.
The result, after a more narrowly revised 0.1% contraction in the third quarter of 2022, means the country averted a technical recession, which requires two consecutive quarters of declining output.
It means the U.K. economy is about 0.6% below its prepandemic level, the ONS said.
Still, the country is expected to face a mild recession this year as inflation remains high, and the impact of high interest rates intensifies, weighing on spending and investment, some economists say.
In a separate release, the ONS said the U.K.’s current-account deficit narrowed to 2.5 billion pounds ($3.10 billion) in the fourth quarter from a revised GBP12.7 billion deficit in the third quarter.
Write to Ed Frankl at firstname.lastname@example.org