UK’s domestic demand continues to drive economic growth

UK's 2015 GDP estimate for the fourth quarter was unrevised at 0.5% q/q and 1.9% y/y, in line with market consensus because of upward revision in services output at 0.04pp from the preliminary estimate. Growth in headline was primarily driven by private consumption at 0.7%q/q, which contributed +0.4pp, while government spending unexpectedly recorded a growth of 0.5% q/q, contributing +0.1pp to the headline index.

Meanwhile, gross fixed capital formation declined at -0.1% q/q, lower than consensus estimate of 1.0% q/q on the back of weak non-residential construction investment which was at - 3.0% q/q, however, business investment increased marginally 0.2% q/q. Consequently, UK's economic growth continues to be driven by domestic demand as it contributed +0.8pp to the main headline.