UK economy reports better than expected growth
It grew 0.2% over the three months to January, matching the previous three-month growth figures. The technology and healthcare sectors were notable areas of strength, while car manufacturing and construction output lagged. There was also an increase in ‘wholesale trading’, which may show that individuals and companies are stockpiling ahead of Brexit.
The services sector, which accounts for about 80% of the private sector economy, grew by 0.3% in January after a 0.2% fall in December. Construction was also stronger than expected, reversing its fall in the latter part of 2018 to grow by 2.8% in January.
Rupert Thompson, head of research at Kingswood, said: “The January GDP data provided some reassurance that the UK economy is not already heading headfast into a Brexit black hole. Following a worrying drop in December, GDP bounced back more than expected in January and while the three month on three month figure was in line with expectations at 0.2%, the year on year gain was a stronger than expected 1.4%. Moreover, while growth of 1.4% is undoubtedly on the sluggish side, it is actually a bit higher than the growth being seen in the eurozone at the moment.”
Joshua Mahony, senior market analyst at IG, said: “We have seen a huge boost to the UK economic picture, with growth, industrial production, and manufacturing production all beating market estimates….proving that the UK economy remains resilient despite Brexit fears and a wider global slowdown.”
The data helped lift the pound today, which was also supported by news that Prime Minister Theresa May appeared to have secured some concessions from the European Union over the Northern Ireland backstop.