British economy closed out 2016 with robust growth
trong consumer spending supported expansion of the dominant services sector
Britain’s economy grew at a robust rate of 0.6 percent in the last three months of 2016, as the country continued to demonstrate resilience in the months after the vote to leave the European Union.
But 2017 promises to be a tougher year as inflation is expected to rise and cut into households’ finances.
The Office for National Statistics reported on Thursday that the quarter-on-quarter growth was dominated by services, with strong contributions from retail sales and travel agency services - consumer-based industries that capitalized on confidence by the public.
The growth was the same as in the second and third quarters of 2016 but better than economists’ expectations for 0.5 percent.
“Strong consumer spending supported the expansion of the dominant services sector,” said Darren Morgan, head of GDP statistics at the ONS, adding that manufacturing bounced back from a weak third quarter and construction remained broadly unchanged.
Dennis de Jong, managing director at UFX.com, noted the growth came despite global uncertainty, Donald Trump’s victory in the United States and the prospect of a sharp break with the European Union, including an exit from its single market.
“The effect of both will be long lasting, with a sharp slowdown expected at some point later this year,” he said.
Earlier data showed that retail sales in December fell at their fastest rate in nearly five years, with shoppers skipping purchases on clothing, shoes and household goods.