GDP data, February 2017 - PwC comments

Published at 10:22 AM on 22 February 2017

John Hawksworth, chief economist at PwC, comments on the latest UK GDP data: 

“Today's revised GDP data were a mixed bag of good and bad news, but this doesn't change the big picture that the UK continued to grow steadily during the six months following the Brexit vote.

“Estimated fourth quarter GDP growth was marked up slightly from 0.6% to 0.7% due primarily to stronger estimated growth in manufacturing. This was linked also to a combination of stronger export growth on the back of a more competitive pound and a gradually strengthening world economy.

“Consumer spending growth also remained solid in the fourth quarter as a whole, although the latest retail sales figures suggest that this has shown signs of tailing off in December and January. 

“Less positively, estimated annual GDP growth in 2016 was revised down from 2% to 1.8%, pushing the UK slightly below Germany (1.9%) in the G7 growth league, though the difference is well within the margin of error on any such early GDP estimates.

“The main reason for the downward revision seems to have been weaker North Sea oil and gas production during the first half of 2016; however, this is a sector-specific trend that does not really reflect the underlying strength of the UK economy. Excluding oil and gas output, estimated UK GDP growth might actually have been revised up in 2016.

“Looking ahead, we still expect some slowdown in UK growth to an average of around 1.5% in 2017 and 2018 as higher inflation bites into consumer spending power, which in turn reduces incentives for increased business investment and hiring in consumer-focused sectors. But there could be some offset to this from stronger export growth as the world economy continues its gradual recovery and the pound remains at competitive levels for UK exporters.”


For further information please contact Tilly Parke: [email protected] / +44 20 7804 8761


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