UK economic growth exceeds forecasts, ONS says

GDP chart

The UK economy expanded by a better-than-expected 0.5% in the last three months of 2017, official figures say.

Economists had expected a 0.4% expansion in the three months to December.

However, the Office for National Statistics (ONS) said the broader picture was “slower and more uneven” growth.

In 2017 as a whole, growth was 1.8% compared with 1.9% in 2016 – the slowest since 2012, the ONS said.

The services sector, which accounts for the bulk of the economy, expanded by 0.6% in the fourth quarter – stronger than the 0.4% rise in the three months to September.

“The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management,” said Darren Morgan, head of GDP at the ONS.

However, consumer-facing parts of the services sector, which include distribution, hotels, catering, transport and communications, posted much slower growth, he said.

Manufacturing also grew strongly, but construction contracted by 1% – its worst quarterly performance since the third quarter of 2012.