Investing.com –Growth in the U.K. economy in the fourth quarter (Q4) showed mixed readings in second estimate revisions while business investment unexpectedly slumped in the October to December period, according to the data released on Wednesday.
In a report, the Office for National Statistics said gross domestic product (GDP) expanded by a seasonally adjusted 0.7% in the fourth quarter, surprising economists who had expected it to be unrevised at 0.6%. The U.K.’s economy grew by 0.6% in the preceding quarter.
Year-over-year however, U.K. economic growth grew 2.0% in the three months ended December 31, missing expectations for it to remain unrevised at 2.2%. Britain’s economy had expanded at an annualized rate of 2.2% in the third quarter of 2016.
Meanwhile, business investment unexpectedly fell by a seasonally adjusted 1.0% in the fourth quarter, compared to the consensus forecast for no change. That followed a gain of 0.4% in the preceding quarter.
Year-on-year, business investment fell 0.9% in the October to December period, compared to expectations of a 0.2% increase and the 2.2% decline registered in the third quarter of 2016.
Additionally, the index of services in the U.K. rose 0.8%, in line with expectations and compared to a prior gain of 1.0%.
Industrial output was also stronger than expected, growing by 0.3%, instead of the initially flat reading.
Construction output was also revised up to 0.2%, from 0.1%.
Exports increased 4.1%, compared to expectations for a 2.0% rise and compared to the 2.6% decline registered in the third quarter.
Imports fell 0.4%, compared to forecasts for a 0.3% gain and after a 1.4% increase in the third quarter.
The 0.7% advance in private consumption was in line in with forecasts and also higher than the previous 0.4% gain.
Immediately following the report, the pound weakened. GBP/USD was trading at 1.0505 from around 1.0514 ahead of the release of the data, EUR/GBP was at 0.8440 from 0.8434 earlier and GBP/JPY changed hands at 140.82 compared to the prior 141.06.
Furthermore, European stock markets traded broadly higher. London’s FTSE 100 rose 0.19%, the benchmark Euro Stoxx 50 edged forward 0.09%, France's CAC 40 gained 0.33%, while Germany's DAX traded up 0.25%.