More signs of UK slowdown appear as Brexit gets under way.

LONDON (Reuters) - Signs that Britain's economy is slowing as it prepares to leave the European Union hardened on Friday, as official data showed a surprise drop in industrial output and construction in February and a mixed performance for trade.

Sterling slid to a one-week low against the dollar after industrial output dipped 0.7 percent in February, worse than all forecasts in a Reuters poll of economists, which had pointed to a 0.2 percent increase. Output fell 0.3 percent in January.

A surprisingly large goods trade deficit - albeit distorted by imports of high-value goods like gold and aircraft - and a slump in construction added to evidence that Britain's economic growth rate peaked towards the end of last year.

Britain's National Institute of Economic and Social Research estimated that Friday's data suggested growth in the first three months of 2017 would slow to 0.5 percent from a robust 0.7 percent in the last three months of 2016.

There are already signs that rising inflation, caused in part by the pound's post-Brexit vote tumble, is crimping spending by consumers, the main drivers of the economy, just as Prime Minister Theresa May begins Britain's EU divorce talks.



Full story at Yahoo News.
By Andy Bruce and Alistair Smout.