UK economy a mirror image of its property market

The preliminary estimate for economic growth in the fourth quarter of 2017 emerged this morning.

It showed the economy grew by 0.5% between October and December of last year - far from booming but better than the 0.4% most economists expected.

In short, it's steady as she goes for UK plc rather than spectacular. In this sense, the UK economy is a mirror image of the property market - just muddling through.

It's hard to draw any real conclusions on the back of this latest GDP data. In the shadow of ongoing Brexit uncertainty and stubbornly high inflation, there's enough growth to not panic but not enough growth to generate confidence.

It's also hard to know to what extent the UK economy is being driven by its own internal strength or the broader global recovery.

Two concerns are the continued reliance on the services sector and the poor performance of construction, which contracted by 1% - its weakest quarterly performance since the third quarter of 2012.

The extent of the construction sector's decline is surprising. Yes, this is a sector that's very sensitive to confidence but at the same time there is a lot of activity at present as developers set out to reduce the supply deficit. It's a bit of an enigma.

All in all, you suspect the economy will plod along in much the same fashion during the course of 2018. Until there is greater clarity on the outcome of Brexit negotiations, a lot of businesses and consumers will sit tight.

The economy needs a spark but in a climate of deep caution it's hard to see where it will come from.

And yet that's not to say we should view this data as poor overall. After all, many predicted Brexit would hole the economy under the waterline — and, to date, that simply hasn't happened.

The economy may be down but it's definitely not out.