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UK GDP growth stays unchanged for Q4 2016

Staff Writer |
UK gross domestic product for the last quarter of 2016 was confirmed at 0.7%, disappointing some economists after recent upgrades to production and manufacturing data.

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Downward revisions by the Office for National Statistics to GDP growth in the first and third quarters, however, meant that the year-over-year growth rate in Q4, 1.9%, was below the consensus forecast of 2.0%.

The national accounts showed GDP growth was driven in the fourth quarter by unsustainable growth in consumers' spending, said economist Sam Tombs at Pantheon Macroeconomics.

Households financed the 0.7% quarter-on-quarter increase in spending by slashing the proportion of incomes that they save to just 3.3%, which he pointed out was a record low, from 5.3% in the first quarter.

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