MNI 5 THINGS: UK Q4 Service Sector Weaker Than Thought

By Jamie Satchithanantham and Laurie Laird

     LONDON (MNI) - The following are the key points from the ONS' data from its

third estimate of GDP published Thursday by the Office for National Statistics.

     - UK Q4 GDP growth was confirmed at 0.4% on the quarter, despite a downward

revision to service sector growth to 0.4% q/q from 0.6% q/q. A 0.6pp upward

revision to construction (now down 0.1% q/q/) prevented a downward revision to

total growth when measured to one decimal place.

     - The service sector grew by 0.2% m/m in January, a slight improvement on

the 0.1% gain in December. A sharp fall in postal and courier activities along

with a downturn in broadcasting revenues kept service growth in check.

     - Business investment continued to hold up despite the ongoing uncertainty

surrounding Brexit. It rose 0.3% q/q in Q4, up from the previously-reported flat

result, to exert a neutral effect on GDP growth. On an annual basis, business

investment increased by 2.6% in Q4, up from the originally reported 2.1%.

     - The current account deficit narrowed to stg18.443bn in Q4 from a

downwardly-revised stg19.173 in Q3, to account for 3.6% of total GDP (the lowest

in just under six years). Analysts had pencilled in an widening to around

stg24bn in Q4 prior to the release. The Q3 deficit was revised down from

stg22.8bn due to late FDI survey data which revealed higher credits and lower

debits.

     - The household savings ratio steadied at 5.2% in the fourth quarter,

leaving the 2017 rate at a record-low 4.9%. However, household borrowing, which

includes large capital outlays, rose for the fifth consecutive quarter to

stg2.2bn -- the longest stretch of net household borrowing on record.

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

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