UK economy grows faster than thought

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The UK economy grew by more than previously reported in the final three months of 2016, according to the latest official estimate.

Gross Domestic Product (GDP) increased by 0.7%, up from 0.6%, according to the Office for National Statistics (ONS).

The upward revision is mainly due to manufacturing industry having done better than thought.

The ONS cut its estimate for growth in 2016 as a whole to 1.8%, down from the 2% it forecast last month.

It also said there had been a slowdown in business investment, which fell by 1.0%, compared with the three months to the end of September.

It attributes that to “subdued growth” in investment in information and communications technology equipment, as well as “other machinery and equipment”.

“UK GDP may have gained some momentum into the end of 2016 but recent news from UK seems to have shown that that momentum has been lost in the early weeks of 2017,” said Jeremy Cook, chief economist at the international payments company, World First.

“Services growth is set to slow, buffeted by rising inflation and slowing real wage gains and a consumer that is not waving but drowning.

“Business investment remains poor, given uncertainty over the negotiations between the UK and the EU following the Brexit vote last summer and while trade was stronger on the quarter, this is purely a function of the devaluation of the pound,” he added.

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