What Brexit woes? UK economy BEATS forecasts with better-than-expected growth numbers
THE UK economy grew beat expectations by growing faster than forecast in February, according to the Office for National Statistics.
Holding better than anticipated by economists, the UK economy grew by 0.2 percent in February compared with January. Analysts at Reuters had been expecting zero percent growth for February. Over the three months to February, gross domestic product rose by 0.3 percent compared with the previous quarter, the ONS said. Previous forecasts had anticipated 0.2 percent growth for the three-month period.
Head of GDP at the ONS Rob Kent-Smith said: "GDP growth remained modest in the latest three months.
"Services again drove the economy, with a continued strong performance in IT.
"Manufacturing also continued to recover after weakness at the end of last year, with the often-erratic pharmaceutical industry, chemicals and alcohol performing well in recent months."
A surge in manufacturing output helped plump up GDP growth, with the ONS linking the rise to firms stockpiling ahead of Brexit.
Spring Statement: Economy forecast to grow faster than Germany
GDP growth remained modest in the latest three months
Companies stepped up production to build inventories in advance of March 29, the original Brexit deadline, before Theresa May asked the European Union for an extension.
The manufacturing sector rose by 0.9 percent in February compared to 1.1 percent in January.
Manufacturing output is now at its highest level since April 2008, driven by domestic demand.
It helped industrial production jump by 0.6 percent during the second month of the year.
The construction sector grew by 0.4 percent while services inched up by just 0.1 percent.
The ONS said there is “some qualitative evidence” of manufacturers bracing for Brexit.
The group said in a statement: "Following a period of contraction, output in production and manufacturing has risen for the second month in a row, the latter driven by domestic demand. Manufacturing is now at its highest level since April 2008....
"This was driven by pharmaceuticals, food products (including beverages) and chemicals, although it was partially offset by a fall in motor vehicle production."
The release of the GDP data kept Sterling afloat, with the pound holding ground near opening levels.
As of 10.20am UK time, the pound is trading at €1.1595 against the euro.