UK economy picks up at end of tough 2017

AFP: Britain’s economy grew 0.5 percent in the final three months of last year, official data showed yesterday, picking up speed despite Brexit uncertainty.

However, the buoyant performance, propelled by the powerhouse services sector, was not enough to prevent the weakest annual growth for five years.

“UK gross domestic product (GDP) was estimated to have increased by 0.5 percent in quarter four 2017, compared with 0.4 percent in quarter three,” the Office for National Statistics (ONS) said.

The reading was in line with market expectations, boosted by the services sector, and was the best performance since the same quarter of 2016.

However, the ONS added that British economic growth stood at 1.8 percent last year.

That was the weakest annual rate since 2012 and marked a modest slowdown from 1.9 percent in 2016.

“The overall picture is one of muddling through,” said Hargreaves Lansdown economist Ben Brettell.

“Growth still looks lacklustre and somewhat unevenly distributed but it’s certainly fair to say the economy has performed much better than many feared in the aftermath of the Brexit vote, boosted by the rising tide of a global recovery which has lifted all boats.”

Many experts had predicted economic chaos in the event of a Brexit vote in the nation’s 2016 referendum, but this has so far failed to materialise. Britons narrowly voted to leave the European Union, with departure scheduled for March 2019.

The ONS added Friday that expansion was primarily driven by the services sector, which accounts for almost 80 percent of economic activity. But it also cautioned over patchy growth.

“Despite a slight uptick in the latest quarter, the underlying picture is of slower and uneven growth across the economy,” said ONS head of GDP Darren Morgan. 
“The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management. “Other services notably consumer facing sectors showed much slower growth.

“Manufacturing also grew strongly but construction again fell,” Morgan added.