**MNI 5 THINGS: UK Q4 GDP Growth Lower, Service Sector Weighs

--UK Q4 GDP +0.4% vs +0.5% First Estimate

     **LONDON (MNI) - The following are the key points from the second estimate

of fourth quarter GDP data published Thursday by the Office for National

Statistics.

     - Defying initial reports of a pick-up at the end of 2017, GDP growth

actually slowed to 0.4%, from an upwardly revised 0.5% in Q3, due to a modest

downgrade of the service sector. Services recorded no growth between November

and December, but Q4 services output was confirmed at 0.6% q/q when measured to

one decimal place.

     - Net trade subtracted 0.5pp from overall growth, the biggest drag on Q4

growth and the worst performance from the sector since the third quarter of

2016. The closure of the key Forties pipeline led to an uptick in energy imports

in the closing months of 2017. Over the calendar year, net trade added 0.4pp to

growth of 1.7% - the first positive influence since 2011.

     - Government spending jumped by 0.6% q/q, the biggest rise since Q1 2016,

lifted by a rise in healthcare spending. Healthcare spending data are partially

based on budgetary projections rather than outcomes.

     - As highlighted in the "MNI 5 Things" preview, household spending fell by

0.3% q/q, down from a downwardly revised 0.4% q/q in the third quarter. This

correlates with the weaker retail sales momentum seen over the latter months of

the year and suggests the squeeze of household incomes has muted appetites to

spend.

     - Business Investment, a indicator of business confidence, was flat in Q4 -

the worst quarterly performance in a year - after a upwardly-revised 0.9% rise

in Q3. Q3 business investment was originally reported at up 0.5%.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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