23.11.201723:28:00UTC+00U.K. Consumer Spending Powers Economic Growth

Consumers fueled the British economy's growth in the third quarter as spending on vehicles regained footing but Brexit appears to be taking a toll on business investment.

According to a report by the Office for National Statistics, household spending increased 0.6 percent, the fastest pace in a year. However, business investment slowed down and net trade weighed on growth. Total GDP grew at an unrevised rate of 0.4 percent, higher compared to the 0.3 percent expansion in the last quarter.

Business investment increased 0.2 percent, its worst performance since the end of 2016 and net trade shaved 0.5 percentage points from growth as exports declined and imports increased.

Despite consumer spending strengthening from growth of just 0.2 percent in the previous three months, recent reports have underlined the risk of a slowdown before a crucial holiday shopping period as the squeeze on incomes from inflation begins to bite.

The economic data comes a day after Chancellor of Exchequer Philip Hammond issued a downgraded economic outlook due to the weak productivity and headwinds presented by Brexit.

The Office for Budget Responsibility estimated the economy will grow 1.5 percent this year, down from the 2 percent growth projected in March and estimated growth will remain below 2 percent through 2022.