United Kingdom economic growth downgraded for final three months of 2017

by Ben Pena February 25, 2018, 1:27
United Kingdom economic growth downgraded for final three months of 2017

Construction was the worst-performing sector, with output estimated to have decreased by 0.7% in the fourth quarter. In midday trading, the pound was 0.5 percent lower at $1.3921.

"There are signs that average weekly earnings, which rose by 2.5 per cent in the fourth quarter, are beginning to respond to the tightness of the labour market, although households are still feeling the squeeze when accounting for inflation, with real earnings falling by 0.3 per cent".

In Torfaen however, there was an increase of 0.8 per cent (465 people), compared to January 2017.

Output per hour rose 0.8 per cent during the three month period, following recorded growth of 0.9 percent in the previous quarter. The 1.6 per cent full-year growth was the slowest since 2011.

You can view the ONS report here.

Surveys suggest that Brexit-related trade uncertainty is prompting many managers to freeze investments.

The annual pace of growth was also downwardly revised, from 1.8% to 1.7%, with the revised number marking a fall from the 1.9% growth seen back in 2016.

Exports declined by 0.2 per cent, while imports jumped by 1.5 per cent, meaning net trade dragged on overall GDP growth, although this was distorted by the London-based worldwide gold trade.

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Despite the revision to GDP, John Hawksworth, PwC chief economist, said: "The big picture has not changed".

"This factor continued to dampen consumer spending growth in the second half of 2017, but was offset by a stronger world economy, which boosted United Kingdom exports in areas like manufacturing and financial and business services".

The figures represent the highest unemployment rate and the biggest quarterly increase, of the four United Kingdom countries.

"To make matters worse, it's becoming clear that the slowing momentum experienced at the tail end of a year ago has dragged into the start of 2018".

"For the Bank of England, which has said rising wages are a key argument for tighter monetary policy, today's data makes a May rate hike all the more likely although as always, this still relies on renewed Brexit progress over coming weeks", said James Smith, developed markets economist at ING.

The jobless rate was expected to remain at 4.3 percent.

The UK economy grew more slowly than was previously thought a year ago as household spending and business investment tailed off in the final few months leaving Britain trailing even further behind America and the eurozone.

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