Sharp drop in UK business investment

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Aberdeen harbourImage source, Getty Images
Image caption,
Aberdeen harbour, where falls in investment by oil companies are threatening jobs

Business investment in the UK has fallen for the second quarter in a row, recording the biggest fall since 2009.

Spending by business fell by 1.4% in the fourth quarter from the previous three-month period.

The Office for National Statistics (ONS) which collects the data said falling oil prices may be to blame.

The oil price has fallen by over a half since June last year, and oil companies have pulled back on investment in the UK and around the world.

Oil impact

"Given the recent steep fall in oil prices, it might be expected that investment by the oil extraction industry might also fall, as oil production becomes less profitable," the ONS said.

Earlier this week the industry body Oil and Gas UK said that after reaching £14.8bn last year investment was forecast to fall to between £9.5bn and £11.3bn in 2015.

Economists have said overall business investment in Britain might also be affected by uncertainty over the outcome of Britain's national elections in May.

On an annual basis, investment still increased by 2.1% on the same period a year ago.

But it marks a sharp slow down from the middle of last year when business investment was growing at an annual rate of 11%.

The ONS also confirmed last month's estimates that the economy grew 0.5% in the last quarter of 2014.

It follows a 0.7% rise in the third quarter.