U.K. economic growth accelerates above expectations in Q4 2017

The U.K. economic growth rate accelerated in the December quarter of 2017, with the preliminary estimate showing a quarterly growth of 0.5 percent. This is above consensus expectations of 0.4 percent growth and third quarter’s 0.3 percent rise. While GDP growth in the year to fourth quarter reportedly decelerated to 1.5 percent from previous 1.7 percent, the ONS recorded full year growth coming in at 1.8 percent, which represents just a mild slowdown from 1.9 percent seen in 2016.

In recent quarters, growth in the U.K. continues to be led by the dominant services sector which grew 0.6 percent in the fourth quarter. The industrial sector, underpinned by solid manufacturing output growth, was also seen growing 0.6 percent quarter-on-quarter. However, the construction sector, provided some offset by recording a decline of 1 percent, its third straight quarterly decline, stated Lloyds Bank.

The assumptions for month growth gave a guide to the possibility of a revision to the initial estimate. The monthly index of services released along with the GDP release indicated growth accelerating to 0.4 percent sequentially in November after a 0.2 percent print in October.

The ONS has assumed a pullback in December, greatly because of a sharp decline in mining and quarrying activity, linked to the shutdown of the Forties oil pipeline for most of the month. Meanwhile, construction output is assumed to have ended the fourth quarter with a fall of 0.1 percent sequentially in December.

At 13:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral 33.8829, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -88.5076. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest