The UK economy expanded at the weakest pace in five years in the first quarter, on weak consumer spending and business investment, the second estimate from the Office for National Statistics showed Friday.
Gross domestic product grew 0.1 percent sequentially in the first quarter, slower than the 0.4 percent expansion registered in the fourth quarter. The rate came in line with the initial estimate published on April 27.
On a yearly basis, GDP expanded 1.2 percent in the first quarter, in line with preliminary estimate, versus 1.4 percent growth seen a quarter ago.
The ONS said while the bad weather had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited, with partially offsetting impacts in energy supply and online sales.
Earlier this week, Bank of England Governor Mark Carney told lawmakers that the slowdown in the first quarter was largely due to temporary and idiosyncratic factors.
While today’s figures confirmed that the economy slowed sharply in first quarter, Ruth Gregory, an economist at Capital Economics, said she doubt that this will prevent the BoE from raising rates again in August.
The production-side breakdown showed that construction output contracted 2.7 percent compared to the previous estimate of -3.3 percent. At the same time, growth in production was revised down to 0.6 percent from 0.7 percent.
The services industries were the largest contributor to GDP growth, with output rising 0.3 percent in the first quarter. Farm output fell 1.4 percent, unrevised from the preliminary estimate.
On the expenditure side, household spending gained 0.2 percent, continuing a pattern of subdued growth seen in recent quarters. At the same time, government spending climbed 0.5 percent.
Gross fixed capital formation increased 0.9 percent sequentially to GBP 84.9 billion in the first quarter. Meanwhile, business investment fell 0.2 percent to GBP 46.1 billion.
The trade deficit narrowed slightly to GBP 9.2 billion from GBP 9.37 billion in the fourth quarter. Total trade imports decreased 0.6 percent, while total exports fell 0.5 percent.