Glimmer of light for UK economy

The Office for National Statistics said gross domestic product fell 0.5% in the snow-hit final quarter of last year – a slight improvement on the 0.6% decline previously estimated.

The figure was revised partly as a result of greater investment from businesses, but economists said the figures still indicated a worrying loss of momentum at the end of 2010.

Today's data showed business investment was flat in the quarter, against the 2.5% decline previously estimated.

Industrial production rose more than previously thought, as a recovering manufacturing sector continued to surge ahead.

And services and construction both fell less than previously estimated.

Despite the contraction in GDP being smaller than thought, the 0.5% reduction is still the biggest fall since the second quarter of 2009. The ONS said the reading would have been flat without the impact of December's adverse weather.

Chris Williamson, chief economist at Markit, says: "The fourth quarter decline overstates the weakness in the economy, reflecting the bad weather at the end of last year, but is nevertheless still a dire reading compared to the UK's peers."

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