Hi Chris,
please bear in mind that the bar you are using may not be round or parallel so .05mm may not be achievable which ever way you do it.
Ifi were making this item and needed to get it as accurate as possible i would do it as follows and yes it is a bit long winded but …
start of with the material a little oversize 2-3 mm or so would suffice.
Set up in a four jaw chuck and get it running as true as you can
centre drill then drill through to 17mm and bore to size or even better is to bore to a size a little under and ream.
for the best accuracy i would make up a mandrel and mount the piece on it so i can finish turn the OD concentric with the bore.
Another difficulty would be measuring the bore at the chuck end and this is why i would allow a few spring cuts or ream so the bore is parallel and round.
thats my version anyhow
Ian