Monthly Economic Review – March 2017
(Based on February 2017 data releases)
- UK GDP growth for Q4 upgraded to 0.7%, but growth for 2016 revised down to 4-year low
- UK retail sales weakens further as inflation continues to rise and earnings growth slows
- German GDP growth picks-up in Q4 as Greece’s economy shrinks
The second official estimate for Q4 2016 UK economic growth (GDP) stood at 0.7%, which was up from the previous estimate of 0.6% and is the fastest rate of growth since Q4 2015. Overall the latest GDP estimate confirmation that the UK economy enjoyed a solid end to 2016. Although the UK economy enjoyed a strong end to 2016, higher inflation is an increasing challenge for businesses as well as consumers.
Retail sales continued to declined and fell by 0.4% in January. Rising prices in fuel and food are significant factors in the slow down with average store prices rising by 1.9% on the year.
The Eurozone GDP growth remains mixed. The biggest economy is German, which grew by 0.7% in Q4, whilst the economies of Finland and Greece contracted. Whilst the Eurozone is likely to grow at a reasonable rate there are concerns over the southern European economies and broad political uncertainty could also weigh on their growth prospects.