Written by: Keith Tully
Published: 9th February 2017
Notably strong consumer spending helped to keep the UK economy on track in recent months despite the ongoing uncertainty surrounding the country’s exit from the European Union.
Official figures from the Office for National Statistics (ONS) show that the economy as a whole grew by 0.6 per cent during the final three months of 2016.
There had been concerns among some economists that the prospect of Brexit may have dampened confidence among consumers but their optimism is apparently more resilient than many had estimated.
The GDP growth figure of 0.6 per cent for the October to December period builds on steady momentum within the economy, which expanded at around the same rate in each of the two previous quarters.
Taking the full year of 2016 as a whole, the ONS has initially estimated that GDP grew at a rate of 2 per cent, which was 0.2 per cent slower than in 2015 but makes the UK’s the fastest growing of all the world’s large and advanced economies.
“Strong consumer spending supported the expansion of the dominant services sector,” explained ONS statistician Darren Morgan, reflecting on the numbers for the final quarter of 2016.
“Although manufacturing bounced back from a weaker third quarter - both it and construction remained broadly unchanged over the year as a whole.”
The services sector accounts for roughly three quarters all activity within the UK economy and the sector expanded by 0.8 per cent between October and the end of December last year, according to the ONS.
Overall sales numbers were up among retailers and travel agencies across the country during the quarter.
For now, all indicators suggest that consumers across the UK are generally feeling confident in their spending and willing to borrow money for all manner of reasons.
However, there are expectations that inflation will begin to rise during 2017 and leave consumers rather less confident and less able to spend as freely as they were over the course of last year.
Consequently the chancellor of the exchequer Phillip Hammond and other relevant experts are expecting to see slower overall growth this year than last.
Taking a broader view, the professional services firm PwC recently released a report suggesting that the UK could have the fastest growing of all the world’s established large economies between now and 2050, despite fears in some quarters that the Brexit process could prove economically damaging.