(Based on December 2016 data releases)
This month’s headlines:
- Q3 UK GDP growth revised up and latest QES points to solid growth in Q4.
- Higher inflation and uncertainty over Brexit likely to weigh on UK’s growth prospects.
- US Federal Reserve raises interest rates and further rises are likely in the coming months.
UK growth was revised upwards with a recorded growth of 0.6% against an estimate of 0.5%. The upwards revision was driven by stronger business and financial services output. The latest Quarterly Economic Survey showed that both the manufacturing sector and the service sector increased. There results suggest that the UK economy grew in line with historic trends.
UK inflation continues to rise, with prices of clothing and motor fuels being the main contributors to this rise. The outlook for UK growth remains weak, with continued uncertainty over Brexit weighing down future growth prospects.
The US Federal Reserve raised interest rates by 0.25 percentage points to a target range of 0.5% and 0.75%. This is the first increase since December 2015. Further rises in US interest rates are expected in the coming months which will place further downward pressure on the value of Sterling.
For full details of this month’s economic review click here.
