23.02.201801:27:00UTC+00UK Economy Falls Behind G7 after 2017 Growth Rate Cut

Britain's economy was weaker than initially thought in 2017, official data showed, leaving the country falling further behind the global recovery as it braces to leave the European Union.

The downgrade of the full-year and fourth-quarter growth rates also raised questions about the strength of the economy as the Bank of England prepares to increase interest rates.

Gross domestic product growth slowed to a quarterly 0.4 percent from an initial estimate of 0.5 percent, wrong-footing economists and cutting 2017 growth as a whole to 1.7 percent, its weakest since 2012.

But the UK has relied heavily on the robust global economy to sustain its economic expansion while consumers have been squeezed by higher inflation caused by the fall in the pound after the Brexit vote.

BoE Governor Mark Carney said this month that rates would probably need to increase sooner and by somewhat more than the central bank had thought in November, when it raised borrowing costs for the first time in a decade.

Britain's year-on-year economic expansion of 1.4 percent in the last three months of 2017 was not just its weakest in five years but also the lowest of any of the economies in the Group of Seven, including long-term laggards such as Japan and Italy.

Sterling was little changed after Thursday's data and government bond prices increased marginally.