Britain's economy has almost ground to a halt as figures showed it grew at its slowest rate in five years in the first quarter of 2018.

The initial estimate of 0.1 per cent for January to March by the Office for National Statistics casts doubt over a Bank of England interest rate hike next month.

It was the weakest quarterly growth since the fourth quarter of 2012 and worse than economists’ predictions for a slowdown to 0.3 per cent.

The Q1 figure compares with 0.4 per cent recorded for Q4 in 2017.

READ MORE: Brexit 'is undermining devolution and powers repatriation is shambolic'

Given there is what Scottish Secretary David Mundell described as a worryingly “significant gap” between growth in Scotland and across the rest of the UK, then the figures for Scotland’s Q1 GDP could be even worse; possibly going negative. They are due to be published in July.

Scotland’s annual GDP growth for 2017 was 0.8 per cent higher than the previous 12 months but less than half that of the UK economy, which by comparison grew by more than double, at 1.8 per cent, over the same period.

Downing Street admitted the Q1 GDP figures were "clearly disappointing" but insisted that the fundamentals of the economy remained "strong".

Asked if uncertainty surrounding Brexit had contributed towards the near-standstill in growth, Theresa May’s deputy spokesman said: "Our economy has remained resilient.

"Growth was stronger than many expected after the referendum. What the Government has been working towards has been providing certainty for business.

"The agreement on the implementation period was an important step providing certainty for businesses," he added.

Ian McConnell: Government department’s response to Brexit criticism beggars belief

While many thought the so-called Beast from the East would have hit Britain's economy hardest, official figures showed that recent snowfalls had a relatively small effect on growth.

ONS spokesman Rob Kent-Smith said: "Our initial estimate shows the UK economy growing at its slowest pace in more than five years, with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly.

"While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited, with the bad weather actually boosting energy supplies and online sales."

The worse-than-expected growth figures dampen prospects of an interest rate hike beyond 0.5 per cent by the Bank of England's Monetary Policy Committee on May 10.

Ben Brettell, senior economist at Hargreaves Lansdown, said: "As recently as last week markets were pricing in a near-90 per cent chance that the Bank of England would raise rates next month but this fell to more like 50 per cent after comments from Mark Carney suggested potential 'softer' economic data and continued uncertainty over Brexit meant policymakers weren't wedded to a May hike."

Rate-setters will also have to consider recent easing in inflation rates, with the Consumer Price Index having dropped back from 2.7 per cent to 2.5 per cent in March; marking a one-year low and bringing it closer to the Bank's two per cent target.

"Today, the market's saying there's just a 25 per cent chance that rates will move in May," said Mr Brettell.

READ MORE: Change of tone at oil giant 'lifts North Sea recovery hopes'

The pound tanked in the wake of the release as traders "hastily" revised their interest rate expectations.

Sterling tumbled as much as 1.1 per cent versus the greenback to 1.375 - its lowest level in nearly two months and dropped 0.9 per cent against the eurozone currency to 1.138.

ONS figures showed that construction was the biggest drag on GDP, dropping 3.3 per cent over the first three months of the year, which was its most dramatic fall since the second quarter of 2012.

Manufacturing growth slowed to 0.2 per cent although that was partially offset by a rise in energy production due to colder weather.

The UK's powerhouse services sector - which accounts for around almost 80 per cent of the economy - was the biggest supporter of GDP growth in the first quarter, having increased by 0.3 per cent thanks in part to business services and finance.

However, the ONS noted that longer term trends pointed to weakening growth in the services sector.

The latest figures come amid a squeeze on consumer finances from higher inflation, triggered by the Brexit-induced collapse in the pound, and slow wage growth.

Labour's John McDonnell claimed the GDP figures "further confirm that continued Tory austerity cuts are weakening growth".

The Shadow Chancellor said: "It's clear to everyone except Philip Hammond that our economy is in need of increased investment and working families are struggling with the cost of living and the burden of increasing household debt."