UK: Economy expanded by 1.8% in 2017 - NIESR

"Our monthly estimates of GDP suggest that output grew by 0.6 per cent in the final quarter of 2017, an increase compared with the third quarter when the economy expanded by 0.4 per cent and the strongest quarterly growth estimate since the fourth quarter of 2016," National Institue of Economic and Social Research of the UK announced on Wednesday.

Key quotes

Economic growth has picked up in the second half of 2017 after a period of subdued growth in the first six months.

The recovery has been driven by both the manufacturing and the service sectors, supported by the weaker pound and a buoyant global economy, while construction output continues to lag.

In November we had forecast final quarter GDP growth at 0.5 per cent and as such today’s revised estimate suggests that activity has strengthened by more than we had previously anticipated.

This recovery, combined with above target CPI inflation, is consistent with a gradual withdrawal of monetary policy stimulus.

We see the BoE raising the policy rate once again by 25 basis points in May and then every 6 months until Bank Rate reaches 2 per cent by mid-2021.