Britain’s current account deficit was much bigger than expected in the fourth quarter, another warning sign about the sustainability of the country’s economic recovery, official data showed yesterday.

The deficit in the October-December period was £22.4 billion, down slightly from an all-time record £22.8 billion in the third quarter.

Economists had expected a deficit of £14 billion.

The Office for National Statistics said the deficit was being driven in part by a fall in income from investments earned abroad – which were lessened by the strengthening of sterling – as well as Britain’s trade deficit.

The ONS confirmed that Britain’s economy grew 0.7 per cent in the October-December period of last year compared with the previous quarter and was 2.7 per cent bigger than in the fourth quarter of 2012.

Economists had expected no change to the ONS’ previous estimates on Britain’s econ-omic growth. Full-year gross domestic product in 2013 was revised down to 1.7 per cent from a previous estimate of 1.8 per cent.

The ONS also said Britain’s dominant services sector got off to a solid start in 2014, growing 0.4 per cent in January, picking up a bit of speed from December.

Data from the ONS released on Thursday showed that retail sales rose by more than expected in February, another sign of continued momentum in Britain’s economy at the start of the year.

And a separate survey published earlier yesterday showed British consumer sentiment rose in March to its highest level since around the start of the financial crisis in 2007.

Despite Britain’s stronger than expected recovery which began last year, total output is still 1.4 per cent below the pre-financial crisis peak reached in the first three months of 2008 – a weaker situation than in almost all other big advanced economies.

The ONS said the savings ratio fell to 5 per cent from 5.6 per cent in the third quarter as weak growth in earnings prompted people to eat into their savings.