UK Trade Improves But Consumer Appetite Eases

The U.K. ended 2016 on a high, recording an unexpected acceleration in growth thanks to the biggest boost from net trade in almost six years.

The question is whether this new economic mix can persist, with the weaker pound helping to deliver a continued export pickup, offsetting a smaller contribution from shoppers who are about to be squeezed by faster inflation. That would help support the economy through the uncertainty from the looming Brexit negotiations, which will see the U.K. begin the process of untangling itself from a four-decade membership of the European Union.

The latest overview of the economy showed that gross domestic product rose 0.7 percent in the three months through December, revised up from 0.6 percent to what was the fastest pace in a year. Trade and consumer spending provided the biggest contributions as business investment fell.

Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.