According to preliminary data from the National Statistical Office, the UK economy experienced minimal growth of just 0.1% in the fourth quarter of the year. Economists surveyed by Reuters had anticipated a growth rate of 0.2% for the period spanning October to December, after a previous growth rate of 0.1% in the third quarter. This underperformance highlights ongoing challenges in the UK economic landscape, accentuated by persistent inflationary pressures.

The report indicates that on a monthly basis, the economy also grew by 0.1% in December, which is a slight decrease from an initially reported growth of 0.2% in the previous month, later revised downward from 0.3%. This recent trend reveals a troubling stagnation in economic performance during a crucial period, fueling concerns among analysts about the sustainability of recovery in the UK post-pandemic. The stability of the pound against the dollar, remaining unchanged at 1.3624, suggests that investor sentiment may be cautious following these disappointing economic indicators.

These growth figures come on the heels of a narrow vote by the Bank of England in early February to keep interest rates steady at 3.75%, amid ongoing concerns over inflation. The decision reflects attempts by the central bank to balance economic growth while managing inflation pressures, which continue to create uncertainty in the economic outlook for the UK. Analysts will be monitoring future data closely to gauge the efficacy of the Bank's policies in fostering a more robust recovery in forthcoming quarters.