UK business investment dropped in the first quarter as overall economic growth slowed sharply, the latest official figures have shown.
This 0.5 per cent fall in business investment, as well as a drop in exports which contrasted with a rise in imports, underlined the unbalanced nature of UK growth. Exports fell 0.3 per cent in the first quarter.
The figures, published by the Office for National Statistics, underline the degree to which UK growth is reliant on hard-pressed households. They show household spending grew by 0.7 per cent in the first quarter.
The ONS confirmed UK gross domestic product growth slowed to 0.4 per cent in the first quarter from an already below-trend pace of 0.6 per cent in the final three months of 2015.
Howard Archer, chief UK economist at IHS Global Insight, said: “It is particularly disappointing business investment fell for a second successive quarter, as it has a key role to play if the UK is to achieve much-needed productivity improvement.”
Mr Archer added: “It was also disappointing to see yet another negative contribution from net trade as exports of goods and services fell.”
David Kern, chief economist at British Chambers of Commerce, said: “Although the GDP [growth] figure for Q1 2016 is unrevised, the falls in business investment and exports are concerning, and highlight the fact that UK growth is unduly reliant on consumer spending.”
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