United Kingdom economy weaker in 2016 than previously estimated

However, growth suffered a slowdown in the fourth quarter, with business investment falling by 1.0%, driven by subdued growth within the "ICT equipment and other machinery and equipment" assets.

Business investment fell over the three month period to December 2016, dropping 1% to £43.5bn, meaning the overall rate for the year declined by 1.5%.

In a fresh boost for Theresa May, the latest figures showed that the economy expanded by 0.7 per cent in the final quarter of past year after the Brexit vote. "However since Brexit, the demand for real estate has softened and it is unlikely that developers will immediately pass on the higher inflationary costs to the end customer". "A slowdown in GDP growth in 2017 therefore now looks inevitable".

However, the pound fell after the report, which no longer showed the United Kingdom was the fastest-growing major advanced economy past year.

In the fourth quarter, services output grew 0.8 percent from prior quarter, with a notable contribution in consumer focused industries.

The ONS said this was due to better industrial production in the quarter than initially thought. This was the result of statisticians downgrading growth during earlier periods of past year. This dragged down the annual rate from two per cent to 1.8 per cent. The UK is also in a fortunate position of capitalising on any pick up in global growth given that 70% of its market is worldwide.

She pointed to the hint from chancellor Philip Hammond that he has a £27bn fiscal stimulus up his sleeve to help maintain momentum in the economy. But business investment fell and there were signs that a tougher year lies ahead. "We also need to acknowledge that a big driver of United Kingdom growth in Q4 last year came from consumption, but with prices on the rise consumers may start to rein in spending, something we've already seen in the drop in retail sales at the beginning of this year".

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