Investing.com - The U.K. economy grew more than expected in the fourth quarter surprising analysts who had expected the expansion to slow from the previous quarter, preliminary official data showed on Thursday.
In a report, the Office for National Statistics (ONS) said gross domestic product expanded by a seasonally adjusted 0.6% in the three months ended December 31, above forecasts for growth of 0.5%. The U.K.'s economy grew by the same amount in the preceding quarter.
Year-over-year, U.K. economic growth expanded 2.2% in the fourth quarter, also above the forecast for an expansion of 2.1%. The U.K. economy grew at an annualized rate of 2.2% in the third quarter.
This preliminary fourth quarter data measures the economy in a period dominated by preparations for triggering Article 50 which will kick start negotiations between Britain and the European Union ahead of the Brexit as well as the surprise election of Donald Trump as the U.S. President.
Additionally, the index of services in the U.K. rose 1.0%, beating expectations for a 0.9% and after a prior gain of 1.1% that was revised up from an earlier reading of a 1.0% advance.
The ONS noted that the fourth quarter expansion was dominated by services, with a strong contribution from consumer-focused industries such as retail sales and travel agency services.
Following declines in the July to September period, construction and production provided negligible positive contributions to GDP growth.
Overall, U.K. GDP was estimated to have increased by 2.0% during 2016, slowing slightly from 2.2% in 2015 and from 3.1% in 2014.
GDP per capita was estimated to have increased by 0.4% during Quarter 4 2016 and by 1.3% during 2016.
Immediately following the report, GBP/USD was trading at 1.2653 from around 1.2664 ahead of the release of the data, EUR/GBP was at 0.8481 from 0.8476 earlier and GBP/JPY changed hands at 143.95 compared to the prior 144.00.
Meanwhile, European stock markets were mostly higher. London's FTSE 100 inched up 0.07%, the Euro Stoxx 50 rose 0.06%, France's CAC 40 advanced 0.21%, while Germany's DAX traded up 0.47%.
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