WORRIES over the state of the UK economy were compounded yesterday by official data showing falls in business investment and exports and subdued consumer spending growth in the first quarter.
The figures, published yesterday by the Office for National Statistics, confirmed the ONS’s initial estimate late last month that the UK economy had grown by only 0.1 per cent quarter-on-quarter in the opening three months of this year.
This was a marked slowdown from muted expansion of 0.4% in the fourth quarter of last year. And it was the weakest quarterly expansion since the final three months of 2012.
Business investment fell 0.2% during the first quarter, the latest figures showed. Bank of England Governor Mark Carney has been among those to flag the dampening impact of Brexit uncertainty on business investment.
The ONS said UK household spending grew only 0.2% in the first quarter. Exports fell 0.5%. The EY ITEM Club think-tank said the “unappetising component breakdown” of the gross domestic product data maintained “concern over [the] strength of the UK economy”.
It noted it had recently trimmed its UK growth forecast for this year to 1.4%, which would be the weakest performance since 2009. The think-tank had previously expected GDP growth to be 1.7% this year. The Bank of England this month cut its UK growth forecast for this year to 1.4%, from 1.8% in February.
Howard Archer, chief economic adviser to the EY ITEM Club, said: “While first-quarter growth was clearly dragged down by the severe weather seen at the end of February and first half of March, the extent of the slowdown suggests an underlying loss of momentum in the economy.”
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