The British economy seemed to accelerate in the fourth quarter of 2017, suggesting that perhaps the Brexit issue was not weighing as heavily on the economy as once feared. In all of 2017, Britain’s real GDP rose 1.8% compared to 1.9% in 2016.

Real GDP rose 0.5% in Q4, which was a very fast rate of growth even though the Office of National Statistics indicated that the big picture remained one of slower and erratic economic growth. The Q4 expansion was mainly driven by services and manufacturing, while construction contracted for the third quarter in a row. However, the UK manufacturing PMI seemed to soften considerably towards the end of last year.

Ironically, through most of 2017 it appeared that Britain was lagging the other G7 countries, but with the benefit of hindsight, it is clear that Britain was also helped by the recovery of the world economy last year.