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Brexit fears fail to halt economic optimism

By Ben Woods

The UK economy is set to defy the predictions of a Brexit-induced slump and cap off 2016 with robust growth when fourth quarter figures are revealed today.

Economists believe gross domestic product (GDP) data for October to December will show a resilient performance from the economy, slowing slightly to 0.5% from 0.6% in the second and third quarters.

Last month's strong figures from the UK jobs market, coupled with hefty output rises, has fuelled an optimistic outlook for economic growth in the final months of last year.

Britain's powerhouse services sector, which accounts for around 80% of UK GDP, brushed aside Brexit uncertainty to jump to a 17-month high in December, according to PMI data.

Official GDP figures have also been revised up for the third quarter, casting further doubt over the pessimistic predictions from economists who had forecast a sharp slowdown after the Brexit vote.

However, fourth quarter growth has the potential to be dragged back by a lacklustre performance from the retail sales in December, which fell at their fastest rate in nearly five years (down 1.9%).

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