British consumers and their heavy spending has helped the UK economy to grow despite fears of a financial standstill.
The economy grew by 0.6% in the fourth quarter of 2016. Figures are indicating that the fears of a slow economy due to Brexit have not yet come to fruition.
The economy grew by 2% in total in 2016, which was only 0.2% lower than in 2015.
ONS statistician Darren Morgan states:
“Strong spending habits by British consumers has supported the growth of certain key sectors of the economy.”
The construction and the manufacturing industry remained unchanged throughout the year.
The majority of economists had predicted a growth figure of 0.5% which turned out to be higher than expected.
The dominant services sector which makes up approximately three-quarters of the economy in Britain grew by 0.8% in the fourth quarter. This was assisted by growth in the hotel, distribution and restaurant industry. Travel agencies and retail sales also supported the growth of this sector, claims the ONS.
Figures have also revealed that agriculture experienced a 0.4% growth, and the construction industry grew by 0.1%. Industrial production remained the same.
Economists are debating whether or not the anticipated economic downturn is still possible or not. Questions are being asked in regards to plans over the government’s economic policy.
If the economy is going to continue thriving does that mean that the government will start to pump more money into public services? Will the government face higher tax receipts? There are a lot of questions that have been left unanswered.
Chief economist for EEF Lee Hopley said: “While services continued to fuel the economy during the final part of last year, manufacturing output was also responsible for a positive contribution.”
She went on to state that she is expecting there to be several challenges in 2017.
Photo credit: Danny Molyneux