London: Britain’s economy grew 0.5 per cent in the final three months of last year, official data showed, 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 as a result of the so-called “Brexit effect”. “UK gross domestic product (GDP) was estimated to have increased by 0.5 per cent in quarter four 2017, compared with 0.4 per cent 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 per cent last year. That was the weakest annual rate since 2012 and marked a modest slowdown from 1.9 per cent in 2016. Bank of England governor Mark Carney, speaking from Davos, admitted there was a short-term “Brexit effect” on economic activity. “What’s happening in the UK is the Brexit effect in the short term,” Carney told BBC Radio 4 from the sidelines of the World Economic Forum in Switzerland.
“Businesses in the UK... are waiting to see what kind of relationships we will have with Europe and what kind of relationships we will have with the rest of the world.” He added however that the economy could grow more strongly this year once those relationships are clear. Howard Archer, chief economic adviser at the EY ITEM Club research group, noted that Brexit turmoil had taken its toll.— Reuters