Yael Selfin, Chief Economist at KPMG in the UK, comments on today’s GDP data:
“Strong government investment helped secure a relatively happy ending to 2017 after revised fourth quarter GDP figures showed the UK economy grew at a slightly more modest pace in the final quarter of 2017, bringing UK GDP growth for the year as a whole to 1.7%.
“Despite the squeeze on household incomes, as wages failed to catch up with rising inflation, consumers did not lose their spending appetite, with consumer spending up by 0.3% during the quarter and by 1.8% during 2017. Export performance was more disappointing, with a 0.2% contraction in Q4 following a subdued Q3 despite the weak pound.
“A strong rise in government spending and investment in the final quarter of 2017 is unlikely to be followed by significant new pledges from the Chancellor in his Spring Statement next month. Instead he is expected to save any spare resources in case the UK economy requires a little extra support when it transitions from the EU at the time of Brexit. We therefore expect this 2018 to see growth somewhat weaker than in 2017.”
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