UK economy grows more than expected in final quarter of 2016

Baku, January 27, AZERTAC

The UK economy expanded faster than expected in the final quarter of last year, with output apparently shrugging off any impact from last summer's Brexit vote, according to The Independent.

According to the Office for National Statistics GDP grew by 0.6 per cent between October and December, ahead of analyst forecasts for a 0.5 per cent expansion.

That also takes UK growth for 2016 as a whole to 2 per cent, which is expected to be the strongest rate of expansion in the G7.

Services, which account for 80 per cent of the economy, are estimated by the ONS to have grown by 0.8 per cent in the October to December period, down only slightly from the 1 per cent expansion in the previous quarter.

Manufacturing expanded by 0.7 per cent, bouncing back from an 0.8 per cent contraction in the third quarter.

Construction is reckoned to have eked out growth of 0.1 per cent, again following a 0.8 per cent fall previously.

The strong overall growth seen in the second half of the year has defied widespread predictions that the UK's vote to leave the EU would lead to a recession.

However, most forecasters - including the Bank of England and the Office for Budget Responsibility - still expect the economy to slow down significantly in 2017 due to a combination of higher inflation hitting consumer spending and also weaker business investment owing to uncertainty over the trade outcome of the Brexit process.

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