The UK economy expanded at a slightly faster pace in the fourth quarter on services and manufacturing output, but the full-year growth was the weakest in five years, preliminary data from the Office for National Statistics showed Friday.
Gross domestic product grew 0.5 percent sequentially in the fourth quarter, while the rate was forecast to remain unchanged at 0.4 percent.
The sequential growth also exceeded the Bank of England’s projection of 0.4 percent.
However, for the whole year of 2017, GDP growth came in at 1.8 percent, the weakest since 2012, following a 1.9 percent expansion posted in 2016.
The production-side breakdown of GDP showed that the dominant services sector advanced 0.6 percent in the fourth quarter, the fastest pace in a year.
Production industries also grew by 0.6 percent, boosted by the second consecutive quarter of strong growth in manufacturing.
The ONS said the 1.3 percent growth in manufacturing was partially offset in total production by a significant fall in oil and gas extraction, caused by the well-publicized repair work made to the Forties pipeline.
On the other hand, construction contracted for the third quarter in a row, falling by 1 percent after easing 0.5 percent in the third quarter.
On a yearly basis, the economy expanded 1.5 percent, slightly slower than the 1.4 percent growth economists had forecast and 1.7 percent growth registered in the third quarter.
Another report from the ONS showed that the index of services climbed 0.4 percent month-on-month in November, which was the biggest expansion since August 2016.
In the three months to November, services output increased 0.4 percent from the quarter ended August.
In the short-term at least, James Smith, an ING economist, sees few catalysts for a further acceleration in UK growth.
The economist said if the UK economy does indeed struggle to move up a gear over coming months, the Bank of England will likely have to tread carefully when deciding whether to raise rates again this year.
BoE Governor Mark Carney told the BBC in an interview on Friday that the Brexit had cost the UK economy billions of pounds in lost output.
The world economy is accelerating and the UK is not benefiting from it, he said.
Carney said there would be a re-coupling of the UK economy with the global economy when greater clarity about the Brexit emerges.
The material has been provided by InstaForex Company – www.instaforex.com
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