Published: Sun, February 25, 2018
Economy | By Melissa Porter

United Kingdom economic growth revised down at end of 2017

United Kingdom economic growth revised down at end of 2017

Unemployment has risen for the first time since 2016.

The UK's unemployment rate has unexpectedly risen by the biggest amount in nearly five years, official figures show.

Real household consumption grew by 0.3 per cent, in line with the expansion rates of previous quarters.

"Rising unemployment is disappointing, but job vacancies reaching another record shows that businesses are creating opportunities". Including bonuses, the rate was unchanged at 2.5 percent.

GDP did increase by 0.4% between quarter 3 and quarter 4 a year ago, the data showed, and 1.7% between 2016 and 2017. Now, analysts expect that as inflation increases over the course of 2018, more problems will arise in the retail sector.

Yael Selfin, chief economist at KPMG in the United Kingdom, said: "There are signs that average weekly earnings, which rose by 2.5% in the fourth quarter, are beginning to respond to the tightness of the labour market, although households are still feeling the squeeze when accounting for inflation, with real earnings falling by 0.3%".

"Services continued to drive growth at the end of 2017, but with a number of consumer-facing industries slowing, as price rises led to household budgets being squeezed", said Darren Morgan, head of GDP at the ONS.

Elsewhere, the statistics agency found an uptick in wages, which could conversely harden the resolve of some rate-setters at the Bank of England to raise interest rates again, possibly as soon as May.

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"It is troubling that instead of focussing on improving Scotland's prosperity, the Scottish Government is choosing to hike taxes for thousands of hard working Scots". Versus the euro, the pound was down 0.2 per cent at 1.29.

The number of people in work fell for the first time since August 2016.

Because an economy is simply people and their economic activity, when the number of people grows, so does the economy.

GDP grew by 0.4% in the October-to-December period, the Office for National Statistics (ONS) said, down from the initial estimate of 0.5%.

The rate for people aged 16 and over was five per cent for that period, up 0.9 per cent on the previous quarter (July-September). Maybe that old motor has some life in it yet.

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