LONDON: Britain's economy grew by 0.1% in the final quarter of last year, figures from the Office for National Statistics showed on Thursday, offering some rare respite from the downbeat economic picture facing finance minister Rachel Reeves.

Economists polled by Reuters had forecast that British gross domestic product would shrink by 0.1% in the fourth quarter.

Last week the Bank of England halved its forecast for growth in 2025 to 0.75%, although other forecasters such as the National Institute of Economic and Social Research remain more upbeat with a 1.5% growth forecast.

Britain's economy recorded moderate growth in the first half of 2024 as it emerged from a shallow recession in the second half of 2023, but slowed in the second half, recording zero growth in the third quarter of the year.

Businesses complained about a 25 billion-pound ($31 billion)rise in employment taxes announced in the new Labour government's first budget on October 30 and have said they plan to cut staff and raise prices in response.

Other headwinds include weak demand elsewhere in Europe, higher energy prices and the prospect of a slowdown in global trade due to tariffs under U.S. President Donald Trump.

Reeves and Prime Minister Keir Starmer have announced measures to reduce planning permit delays and others regulatory barriers in a bid to boost confidence.

But a rise in borrowing costs and the subdued economic picture mean Reeves may be forced to announce spending cuts if she is to stay within her self-imposed borrowing rules when government forecasters update their projections next month. ($1 = 0.8024 pounds) (Reporting by David Milliken and Andy Bruce Editing by William Schomberg)