(AFP/APP): Britain's economy grew 0.5 percent in the final three months of last year, official data showed Friday, 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.
“UK gross domestic product (GDP) was estimated to have increased by 0.5 percent in quarter four 2017, compared with 0.4 percent 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 percent last year. That was the weakest annual rate since 2012 and marked a modest slowdown from 1.9 percent in 2016. “The overall picture is one of muddling through,” said Hargreaves Lansdown economist Ben Brettell.
“Growth still looks lackluster and somewhat unevenly distributed … but it's certainly fair to say the economy has performed much better than many feared in the aftermath of the Brexit vote, boosted by the rising tide of a global recovery which has lifted all boats.”
Many experts had predicted economic chaos in the event of a Brexit vote in the nation's 2016 referendum, but this has so far failed to materialize. Britons narrowly voted to leave the European Union, with departure scheduled for March 2019.
The ONS added Friday that expansion was primarily driven by the services sector, which accounts for almost 80 percent of economic activity. But it also cautioned over patchy growth. “Despite a slight uptick in the latest quarter, the underlying picture is of slower and uneven growth across the economy,” said ONS head of GDP Darren Morgan.
“The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management.
Growth in lending to Eurozone businesses slows: ECB
The pace of growth in lending to businesses in the Eurozone slowed in December, European Central Bank data showed Friday, in a mild setback for the Frankfurt institution.
Credit to businesses grew by 2.9 percent year-on-year last month, adjusting for some purely financial transactions, a drop of 0.2 percentage points compared with the figure for November. Meanwhile, lending growth to households held steady in December, at 2.8 percent.
Overall, lending to the private sector expanded by 2.8 percent last month, down from 2.9 percent in November. Credit growth is a key indicator for the ECB of how it’s easy-money policy is affecting the real economy.
It has set interest rates at historic lows, offered cheap loans to banks and bought tens of billions of euros per month in bonds in a bid to pump cash through the financial system and to businesses and households.
Policymakers hoped the moves would stoke growth and power inflation towards their target of just below 2.0 percent. But while economic expansion has accelerated in the 19-nation Eurozone — hitting 2.4 percent last year according to ECB estimates — inflation has remained sluggish, reaching just 1.4 percent in December.
There was a glimmer of good news for central bankers in an ECB survey of private-sector analysts also published Friday, which found forecasters had slightly upgraded their inflation expectations for the coming years. The professionals' predictions now see inflation hitting 1.5 percent this year, 1.7 percent in 2019 and 1.8 percent in 2020.
In the longer term, the forecasters see inflation at around 1.9 percent, exactly in line with the ECB's target.