LONDON: British economic growth unexpectedly picked up speed in the last three months of 2017 in the lastest sign that the hit from the Brexit vote in 2016 was not as sharp as once feared by investors.
Gross domestic product grew by 0.5 percent in the fourth quarter from the previous three months, faster than the median forecast for growth of 0.4 percent in a Reuters poll of economists.
That was the fastest pace of quarterly growth in 2017.
However, the Office for National Statistics said the big picture remained one of slower and more uneven expansion in the world's sixth-biggest economy.
In 2017 as a whole, growth was 1.8 percent compared with 1.9 percent in 2016, the slowest since 2012.
Britain's economy grew more weakly than other big rich nations for much of last year as the impact of the 2016 Brexit vote pushed up inflation and many businesses turned cautious ahead of the departure from the European Union in March 2019.
However, growth has fared better than most predictions made around the time of the Brexit vote, in large part due to the recovery in the world economy last year which is expected to carry on in 2018.
Bank of England Governor Mark Carney said earlier on Friday that Britain's economy could start to grow more quickly later this year if there is clarity about Britain's future relationship with the EU.
"Despite a slight uptick in the latest quarter, the underyling picture is of slower and uneven growth across the economy," ONS statistician Darren Morgan said.
Compared with the same period in 2016, growth between October and December slowed to 1.5 percent, its weakest pace since the first quarter of 2013 and down from growth of 1.7 percent in the third quarter.
The Reuters poll had pointed to growth of 1.4 percent.
The Bank of England said last month it expected the economy might have slowed slightly in late 2017.
Its interest rate-setters are due to announce their next decision on borrowing costs on Feb. 8. They raised rates for the first time in more than a decade in November.
Most economists have said they expect the next interest rate hike in late 2018 but some think it could come as soon as May.
Friday's data showed Britain's dominant services sector grew by 0.6 percent in the fourth quarter, gaining pace after growth of 0.4 percent in the third quarter, the ONS said.
In November alone, services output growth was the strongest since August 2016, jumping by 0.4 percent from October.
Industrial output slowed to 0.6 percent from 1.3 percent in the third quarter after the Forties oil pipeline was closed for more than two weeks in Decmeber following the discovery of a crack.
Britain's construction sector shrank by 1.0 percent, its worst quarterly peformance since the third quarter of 2012.
The preliminary estimates of GDP do not include a breakdown of spending, and are heavily based on estimated data.