The data underscore how a hoped-for rebalancing of the U.K. economy toward trade and investment and away from debt-fueled consumption remains a distant prospect. Data on public finances Friday showed the U.K.'s budget deficit was wider in November than a year earlier. The Bank of England has warned that rebalancing will be required if Britain's economic recovery is to prove sustainable.
Ratings agency Standard & Poor's on Friday affirmed its AAA rating for the U.K. but retained a negative outlook, citing "risks to the sustainability of growth," in particular the economy's apparent reliance on consumer spending and a rapidly-recovering housing market.
Economists fret that growth may slow in 2014 without a pickup in trade and investment, as there are reasons to doubt consumers can sustain their spending spree. British households are heavily indebted and earnings growth is weak. A poll published earlier Friday showed U.K. consumer confidence worsened in December.
"Lower saving can only support growth in spending for so long," said Samuel Tombs, a U.K. economist at Capital Economics. "For now, the economy's growth spurt seems to be exacerbating existing imbalances in the economy, rather than helping them to heal."
David Kern, chief economist at the British Chambers of Commerce, said the government needs to think of new ways to boost exports to foster a rebalancing.
Prime Minister David Cameron has made trade a centerpiece of his foreign policy, although economists say British exports are likely to remain weak as long as demand in the biggest market for U.K. goods and services—the euro zone—remains subdued.
Friday's data did include some welcome news for Mr. Cameron and Chancellor of the Exchequer George Osborne.
Business investment grew 2% between the second and third quarters, and figures suggest the economy grew faster in 2012 than earlier estimates. The ONS said the U.K. economy is now 2% smaller than it was before recession struck in 2008, not 2.5% as previously thought.
The economy also appears to have got off to a good start in the final quarter. Data for October showed the services sector, which accounts for the bulk of U.K. output, expanded 2.1% on a year earlier.
The data underscore how a hoped-for rebalancing of the U.K. economy toward trade and investment and away from debt-fueled consumption remains a distant prospect. Data on public finances Friday showed the U.K.'s budget deficit was wider in November than a year earlier. The Bank of England has warned that rebalancing will be required if Britain's economic recovery is to prove sustainable.
Ratings agency Standard & Poor's on Friday affirmed its AAA rating for the U.K. but retained a negative outlook, citing "risks to the sustainability of growth," in particular the economy's apparent reliance on consumer spending and a rapidly-recovering housing market.
Economists fret that growth may slow in 2014 without a pickup in trade and investment, as there are reasons to doubt consumers can sustain their spending spree. British households are heavily indebted and earnings growth is weak. A poll published earlier Friday showed U.K. consumer confidence worsened in December.
"Lower saving can only support growth in spending for so long," said Samuel Tombs, a U.K. economist at Capital Economics. "For now, the economy's growth spurt seems to be exacerbating existing imbalances in the economy, rather than helping them to heal."
David Kern, chief economist at the British Chambers of Commerce, said the government needs to think of new ways to boost exports to foster a rebalancing.
Prime Minister David Cameron has made trade a centerpiece of his foreign policy, although economists say British exports are likely to remain weak as long as demand in the biggest market for U.K. goods and services—the euro zone—remains subdued.
Friday's data did include some welcome news for Mr. Cameron and Chancellor of the Exchequer George Osborne.
Business investment grew 2% between the second and third quarters, and figures suggest the economy grew faster in 2012 than earlier estimates. The ONS said the U.K. economy is now 2% smaller than it was before recession struck in 2008, not 2.5% as previously thought.
The economy also appears to have got off to a good start in the final quarter. Data for October showed the services sector, which accounts for the bulk of U.K. output, expanded 2.1% on a year earlier.
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