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UK economic growth accelerated at a better than expected pace at the end of the year, revised upwards from 0.6 per cent to 0.7 per cent but softening across 2016 as a whole.

A second GDP estimate from the Office for National Statistics upgraded the growth rate in the three months to the end of December to its highest in 12 months, but year on year growth as a whole fell from 2.2 per cent to 2 per cent.

The figures mean the economy grew by 1.8 per cent over 2016 as a whole, down from a first estimate of 2 per cent and means the UK can no longer be considered as the best performing large advanced world economy last year.

By comparison, the eurozone grew 1.7 per cent, the US 1.6 per cent and Germany topped the list at 1.9 per cent last year – a five-year high for Europe’s largest economy.

Darren Morgan, head of GDP at the ONS, said fourth quarter growth was boosted by better than expected manufacturing, adding:

Overall, the dominant services sector continued to grow steadily, due in part to continued growth in consumer spending, although retail showed some signs of weakness in the last couple of months of 2016, which has continued into January 2017.

The British economy has now grown nearly 16 per cent since bottoming out during the depths of the financial crisis in 2008.

Consumer spending and the country’s dominant services sector continued to drive growth last year, with the ONS adding that the effect on trade from sterling’s post-Brexit vote fall “remains unclear”.

Sterling slipped to fall 0.2 per cent against the dollar on the news.

Copyright The Financial Times Limited 2017. All rights reserved.
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