Pulse.ng logo
Go

Brexit British economy holds up as negotiations loom

British GDP expanded 0.6 percent between October and December, matching the GDP growth during the previous two quarters

  • Published: , Refreshed:
A pedestrian shelters from the rain near the Big Ben clock on June 25, 2016, following the result of the UK's EU referendum vote play

A pedestrian shelters from the rain near the Big Ben clock on June 25, 2016, following the result of the UK's EU referendum vote

(AFP/File)

Britain's economy grew solidly in the final months of last year, official data showed Thursday, even as the country prepares to navigate a difficult departure from the European Union.

Gross domestic product expanded 0.6 percent between October and December, matching the GDP growth during the previous two quarters, the Office for National Statistics said.

For 2016 as a whole, British growth reached 2.0 percent, a decline from the previous year's increase of 2.2 percent.

The economy has performed better than expected since the country voted in June to exit the European Union, though analysts expect a more difficult 2017 as the government negotiates its departure from the bloc.

Britain's economy grew solidly in the final months of last year, official data showed Thursday, even as the country prepares to navigate a difficult departure from the European Union. play

Britain's economy grew solidly in the final months of last year, official data showed Thursday, even as the country prepares to navigate a difficult departure from the European Union.

(AFP)

The data "provides yet more evidence that the UK economy is running along nicely", said David Cheetham, market analyst at XTB trading group.

However, "the process of beginning formal discussions on the terms of life outside the EU is seemingly drawing closer and this poses a major threat to the UK economy," he added.

Weak pound helps

The pound slipped slightly against the dollar Thursday after the release of the data, again helping to lift London's FTSE 100 stock index.

Since the Brexit referendum, the pound's value has slumped about 18 percent against the dollar and some 14 percent against the euro.

That has helped drive the FTSE 100 to record highs, as the benchmark index contains several multi-nationals which earn in dollars and euros as well as pounds.

The weak pound is also boosting exporters, whose products have become less expensive for buyers abroad.

For the UK economy overall, "the strong end to last year provides plenty of momentum heading into 2017", said Ruth Gregory, a UK economist at Capital Economics, a research group.

"And while growth looks set to ease this year, the beneficial effects of the fall in the pound should help to ensure that the slowdown won't be too severe," she said.

One beneficiary is likely to be the British car industry, which exports 80 percent of its vehicles, mostly to the EU.

More than 1.7 million cars were produced in Britain last year, an increase of 8.5 percent on 2015 and the highest output since 1999, the Society of Motor Manufacturers and Traders said Thursday.

Still, UK growth in the fourth quarter was "once again driven by the dominant services sector... with particularly strong contributions from consumer focused areas like retail and travel", said Ben Brettell, senior economist at stockbroker Hargreaves Lansdown.

"Meanwhile construction and industrial production made negligible contributions to the overall growth rate. This highlights the crucial role of consumer spending in keeping the UK economy afloat," Brettell said in a research note."

Do you ever witness news or have a story that should be featured on Pulse Nigeria?
Submit your stories, pictures and videos to us now via WhatsApp: +2349055172167, Social Media @pulsenigeria247: #PulseEyewitness & DM or Email: eyewitness@pulse.ng. More information here.