Money (6)

The UK economy grew by 0.5% in the final quarter of 2015, according to the Office for National Statistics (ONS).

The final quarter figures mean the economy grew by 2.2% in 2015, down from 2.9% in 2014. It means annual economic growth has slowed in each other the last three years, but still leaves the UK as one of the fastest growing developed countries.

The fourth quarter figures follow growth of 0.4% in the third quarter of the year, and represents a rise of 1.9% compared with the final quarter of 2014.

The ONS said the services sector - which accounts for roughly 70% of GDP - grew by 0.7%, with agriculture close behind on 0.6%. However, industrial production and construction contracted by 0.2% and 0.1%, respectively.

Earlier this month, the Chancellor George Osborne warned that the economy faces a 'cocktail' of risks.

James Sproule, Chief Economist at the Institute of Directors, said: "After volatility in the financial markets during the first few weeks of the year, these GDP figures should settle nerves about the health of the real economy. Growth of 0.5 per cent a quarter is far from remarkable, but with services continuing to power the recovery, and housebuilding expected to undergo something of a revival as the year progresses, this expansion looks sustainable."

Chris Williamson from economic researchers Markit said:"The upturn masks an unbalanced economy and a slowing pace of expansion, with the annual rate of growth slipping to the weakest for almost three years.

"Uncertainty over 'Brexit', weak overseas growth and financial market volatility are all creating an unsettling business environment and point to downside risks to the economy in 2016.

"The coming year could easily see the pace of economic growth slow further from last year's 2.2% expansion, and the chances are growing that we will see yet another year in which interest rates are left at their record low of 0.5%."