Published: Thu, February 23, 2017
Finance | By Laverne Griffith

United Kingdom economy accelerates but still loses fastest in G7 crown

Figures from the Office for National Statistics showed that business investment dropped by 1.5 per cent previous year, a fall of £2.7bn to £43.5bn.

The British economy surged in the final months of past year, with a revised official estimate upgrading the GDP growth figure for the quarter to the end of December.

That was offset, however, by a revision to growth in the first three months of 2016 from 0.3 per cent to 0.2...

The ONS said this was due to better industrial production in the quarter than initially thought.

The second estimate from the ONS, released this morning, shows the joint-fastest quarterly growth rate since 2014.

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But he will keep a close eye on warning signs in Wednesday's data. With Brexit negotiations afoot and ongoing geopolitical concerns among the G7, the knock on effect on business confidence may slow the pace of growth in 2017, both at home and overseas.

However, the year-on-year reading showed Britain's economy expanded 2% in the fourth quarter, down from the 2.2% reading recorded in the preliminary estimate, which analysts expected to remain unchanged. "The pattern of strong consumer spending and weaker business investment can only be a limited one".

But it also predicts a growing squeeze on consumers as inflation rises due to the pound's fall since June's vote to leave the European Union. Investment by companies was 0.9 percent lower compared with the fourth quarter of 2015.

Chris Williamson, chief business economist at IHS Markit, said: "The news of faster the previously thought growth at the end of a year ago is marred by worrying signs about the durability of the upturn".

The BoE this month signalled that it is in no hurry to raise interest rates with so much Brexit-related uncertainty ahead. Firms are expected to decrease their investment plans as Britain negotiates its departure from the EU.

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