UK economic output grew by 0.5 per cent in the first quarter – boosted by stockpiling as businesses fretted over the danger of a no-deal Brexit on the originally planned departure date of March 29 – official figures show.
Howard Archer, chief economic adviser to the EY ITEM Club think-tank, noted growth may also have been boosted to a limited extent by stockpiling by consumers, as well as businesses.
He said: “First-quarter growth was clearly buoyed by stockbuilding and overstates the economy’s strength. We expect there to be some payback in the second quarter at least. Indeed, we suspect that GDP growth may well be limited to just 0.2% quarter-on-quarter in the second quarter, while the third quarter could also be challenging.
“With Brexit potentially being delayed until October 31 and a challenging domestic political environment, prolonged uncertainty is expected to weigh down on economic activity. Businesses’ willingness to invest and to commit to major new projects is expected to be particularly affected.”
Net trade was a major drag on UK growth in the opening three months of this year, as imports surged by 6.8% quarter-on-quarter amid stockpiling, the figures from the Office for National Statistics show. Exports were flat.
However, consumer spending proved resilient, with a 0.7% quarter-on-quarter rise.
GDP fell by 0.1% month-on-month in March, having climbed by 0.2% in February and 0.5% in January.
Business investment rose by 0.5% during the opening three months of this year, following four consecutive quarters of contraction. Business investment in the first quarter was down 1.4% on the same period of 2018.
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