UK GDP growth more than forecasts, Pound hits new high

UK GDP growth more than forecasts, “ experts say the Britain GDP growth %0.6 and its more than expected, The Sterling Pound hits new six-week high versus Euro and FTSE 100 rises after UK GDP growth.

UK GDP 2016

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The U.K.’s gross domestic product rose 0.6 percent quarter-on-quarter in the three months to December, preliminary figures by the Office for National Statistics showed on Thursday morning, the same rate of growth as the previous two quarters. Analysts had been predicting a 0.5 percent rise for the fourth quarter.

The yearly rate also went above expectations, growing at 2.2 percent, in comparison to the consensus of 2.1 percent.

Ahead of the release, sterling touched a six-week high against the dollar, last standing around $1.2670 at 9.15 a.m. London time. It maintained a steady pace after the release, as did the FTSE 100 which continued to hover around the flat line. Against the euro, the pound hit a three-week high shortly after the new numbers.

Pound hits new high and FTSE 100 rises after UK GDP growth beats forecasts

Britain’s economy grew by 0.6pc in the final three months of 2016, again defying predictions of a slowdown.

That matches the 0.6pc growth rate recorded in the three months before the EU referendum, and again in the three months following the vote.

As a result the economy expanded by 2pc over the year, according to the first estimates from the Office for National Statistics.

That is down slightly from 2.2pc in 2015 and from 3.1pc in 2014.

Economists had anticipated growth could slow to 0.5pc for the fourth quarter of the year.

The services sector led the expansion, growing by 0.8pc.

Manufacturing was a close second at 0.7pc, though the production industries – which includes manufacturing as well as extractive operations such as oil production and mining – did not grow or shrink on the quarter.

Agriculture grew by 0.4pc while construction output barely budged, rising 0.1pc in the three-month period.

“Strong consumer spending supported the expansion of the dominant services sector and although manufacturing bounced back from a weaker third quarter, both it and construction remained broadly unchanged over the year as a whole,” said Darren Morgan, head of GDP at the Office for National Statistics.

Philip Hammond, the Chancellor, said the figures put the UK in a good position for the challenges ahead, as the UK prepares to leave the EU.

“Every major sector of the economy grew last year, which is further evidence of the fundamental strength and resilience of the UK economy,” he said.

“There may be uncertainty ahead as we adjust to a new relationship with Europe, but we are ready to seize the opportunities to create a competitive economy that works for all.”

Economists expect growth to slow further in 2017, with the average forecast anticipating GDP will expand by 1.4pc this year.

“We’d caution against complacency. Consumers won’t be ramping up spending thanks to rising inflation and sluggish wage growth, and businesses’ appetite to sign off big investments will depend on how they view the progress of Brexit negotiations,” said Lee Hopley, chief economist at the manufacturing industry body EEF.

“There’s every chance that this rate of expansion is the high point for the next couple of years.”

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