Pre-Brexit cheer for Hammond and UK economy from latest data

(c) Sky News 2019: <a href="">Pre-Brexit cheer for Hammond and UK economy from latest data</a>

The UK economy provided some unexpected positive news today as high street sales grew by more than anticipated and the public finances continued to outperform.

The volume of products bought by British consumers rose by 0.4% in February.

Analysts had expected a 0.4% contraction.

The positive performance suggests the wider economy is likely to grow faster than expected in the first quarter of the year.

Some economists suggested the leap could be evidence of consumers starting to stockpile goods ahead of Brexit - though the fact that food sales declined may discount this possibility.

The Office for National Statistics (ONS) also revealed that government borrowing had dropped to its lowest level in 17 years this financial year, as tax revenues continue to come in above expectations.

It reported public sector net borrowing of £200m in February, £1bn less than in February 2018.

It meant the total deficit so far this financial year (since last April) was £23.1bn - a sizeable £18bn fall compared with the same period last year.

The reduction in the deficit comes the week after chancellor Philip Hammond pledged in his Spring Statement to end austerity provided the Prime Minister manages to pass her Brexit deal next week.

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However the ONS also announced that for the first time since comparable records began, financial firms had cut back their total net investment with net disinvestment of £34bn in the fourth quarter of 2018 - the lowest figure on record.

The fall in investment largely reflects sales of overseas shares by UK financial institutions.