GDP growth stays unchanged for fourth quarter of 2016

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.

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.