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UK economy grows faster than expected at 0.5% in final quarter of 2017

UK economy is still struggling to bounce back to levels seen in the final quarter of 2016. Credit: PA

The UK economy grew faster than expected in the last three months of 2017 at 0.5%.

Economists had been expecting growth of 0.4%, according to consensus figures with some even forecasting slowdown to just 0.3%.

The gross domestic product (GDP) was propped up by the services sector - which accounts for around 79% of the economy.

Despite the uptick, economists warned there are signs of "slower and uneven" growth ahead.

In its initial estimate for October to December, the Office for National Statistics (ONS) said services grew 0.6% quarter on quarter. Business and financial services made the biggest contribution, accounting for work from the likes of lawyers, architects and business administrators.

However, the ONS said longer-term trends were pointing to a broader slowdown.

ONS head of GDP Darren Morgan said: "The boost to the economy at the end of the year came from a range of services including recruitment agencies, letting agents and office management.

"Other services - notably consumer facing sectors - showed much slower growth," he said, referring to industries such as distribution, hotels, catering, transport and communications.

"Manufacturing also grew strongly but construction again fell."

The UK economy is still struggling to bounce back to levels seen in the final quarter of 2016 when GDP rose by 0.6%.