LONDON (Reuters) – British business loved strong progress in November, benefiting from a global upturn that has allowed the economic system to outperform gloomy forecasts made after 2016’s Brexit vote, though it nonetheless lags behind its worldwide rivals.
The British economic system grew extra slowly than all different Group of Seven members within the first 9 months of 2017 as consumer-facing sectors suffered from a surge in inflation attributable to sterling’s post-Brexit vote plunge.
With departure from the European Union set for March 2019, few economists suppose progress will enhance this yr.
But the newest official information signalled that business stays a vivid spot: Manufacturers recorded their quickest annual progress since March 2011 within the three months to the tip of November, increasing by three.9 p.c year-on-year.
The sector, which accounts for round a tenth of British financial output, additionally posted its seventh consecutive month-to-month growth – the longest unbroken run in additional than 20 years.
The National Institute of Economic and Social Research (NIESR) mentioned the figures pointed to GDP progress of zero.6 p.c within the final quarter of 2017, which might be the strongest of the yr and would elevate full-year progress to 1.eight p.c.
The Bank of England mentioned in November it anticipated progress to stay at zero.four p.c within the final three months of the yr, after it raised its key rate of interest for the primary time since 2007.
If progress seems quicker, it’d enhance the possibility of the BoE elevating charges once more in May moderately than later in 2018 as most economists anticipate.
Financial markets have been unmoved by the information, nonetheless.
“The UK will need more than just strong industrial production figures though if it is to fare well,” mentioned Christian Jaccarini, economist on the Centre for Economics and Business Research consultancy.
Construction output within the three months to November contracted 2.zero p.c in contrast with the earlier three months, the largest dip since August 2012, the Office for National Statistics mentioned.
Earlier on Wednesday, the British Chambers of Commerce mentioned the economic system seemed set for an “underwhelming” 2018, with business subdued forward of Brexit and reluctant to take a position, in response to its quarterly survey – the biggest of its kind.
The ONS mentioned industrial output rose by a month-to-month zero.four p.c in November, in contrast with zero.2 p.c in October, the ONS mentioned, spurring an annual rise of two.5 p.c. Economists participating in a Reuters ballot had anticipated to see output rise zero.three p.c on the month and 1.eight p.c on the yr.
“There was strong and widespread growth across (British) manufacturing with notable increases from renewable energy projects, boats, planes and cars for export,” ONS statistician Ole Black mentioned.
Goods export volumes within the three months to November have been 9.1 p.c increased than the identical interval in 2016, although the products commerce deficit exceeded all forecasts in a Reuters ballot.
Other international locations are doing higher. German industrial output rose by three.four p.c in November alone, its largest acquire since 2009 and one which places the economic system there on monitor for progress of no less than 2.2 p.c final yr.
Figures for Britain’s companies sector – which is round eight instances the scale of producing and has been rising slowly – are due out on Jan. 26.
Wednesday’s information confirmed Britain’s whole commerce deficit, which incorporates items and companies, hit a five-month excessive of two.eight billion kilos in November.
Reporting by Andy Bruce and David Milliken; Editing by Hugh Lawson