The UK economy has the weakest growth since 2012



  Tractor in the snow

Image copyright
PA

Image caption

The impact of the weather front & # 39; The Eastern Beast & # 39; it was "relatively small", said the ONS

The UK economy grew at its slowest pace since 2012 in the first quarter of the year, according to the Office of National Statistics (ONS).

GDP growth was 0.1%, down from 0.4% in the previous quarter, driven by a sharp drop in construction output and a slow manufacturing sector.

The ONS said that the extreme weather of February and March had a "relatively small impact."

The pound sterling fell sharply as the chances of an interest rate increase in May decreased.

] After the news, he lowered a penny against the dollar to $ 1,380.

Rob Kent-Smith, chief of national accounts at ONS, said: "Our initial estimate shows that the UK economy is growing at its fastest rate. slow in more than five years with weaker manufacturing growth, moderate consumer industries and construction production falling significantly.

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

Bank Decision

Construction was the biggest drag on GDP, as it experienced its most dramatic decline since the second quarter of 2012, falling 3.3% during the first three months of the year.

Manufacturing growth slowed to 0.2%, although that was partially offset by an increase in energy production due to the colder weather.

Consumer spending has also been squeezed by a combination of nflation and slow wage growth.

Samuel Tombs, chief economist of the United Kingdom at Pantheon Macroeconomics, said the results meant that the Bank of England was unlikely to raise interest rates in May, as some economists had expected.

"The probability of a hike in May rates is now close to zero after the slowdown in GDP growth in the first quarter," he said.

"With inflation retreating much faster than expected by the Monetary Policy Committee and wage growth is not yet gaining momentum, the MPC has the luxury of being able to delay the increase in interest rates in May."


Source link

Check Also

Alaska Airlines introduces basic rates for seats on the back of the plane

Delta, American and United are already selling a similar no-frills rate called "basic economy" that …