The first estimate of GDP growth for the final quarter of 2016 came in at 0.6% versus Q3 and 2.2% higher than Q4 2015. GDP is now 8.7% higher than its pre-crisis peak in 2008. However, on a per capita basis the gain is a more modest 1.9%.
Consumer price inflation (CPI) rose to 1.6% in the year to December, up from 1.2% in November. This is the highest CPI reading since July 2014. The food and transport sectors - which are highly reliant on imports and hence impacted by sterling weakness – were the largest contributors to the rise.
The latest employment statistics for the three months to November 2016 show a decrease in employment of 9,000 when compared against the three months to August 2016. Unemployment fell by 52,000 to 1.6 million, with the unemployment rate falling marginally to 4.8%.
Brexit update: the Prime Minister has confirmed that she will pursue a Hard Brexit with immigration controls and “frictionless” cross-border trade. Sterling recovered some ground on the back of the positive noises on the future trading relationship. Whether this can be achieved or not remains a matter of debate for now.