British economy holds up as Brexit negotiations loom
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.
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.
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.
Since the Brexit referendum, the pound’s value has slumped about 18 percent against the dollar and some 14 percent against the euro.
The weak pound is also boosting exporters, whose products have become less expensive for buyers abroad.
“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.
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.
“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.