“While today’s GDP data came in stronger than expected, the OBR is still poised to downgrade its growth forecast next month. This will be an additional blow for the Chancellor and will add pressure to already tight fiscal plans, which may require reining in some of the scheduled public spending this year.
“We anticipate a modest pick-up in economic growth this year. Falling borrowing costs, alongside relatively healthy household balance sheets should support consumer spending. Government spending is also set to increase in the first half of this year, which could push up economic activity in the near term.
“Nevertheless, several headwinds to growth remain. Business sentiment has weakened significantly over the past few months on the back of the upcoming tax rises in April, in addition to growing global trade frictions. The uncertain economic environment firms are operating in could constrain business investment growth and weigh on economic activity this year.”
