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UK GDP growth grinds to near-halt, consumer confidence slips again

Staff Writer |
UK economic growth in the first quarter was the worst in more than five years, undermining the case for a Bank of England rate hike next month.

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Gross domestic product grew just 0.1% in the first three months of the year compared to the preceding month, the Office for National Statistics revealed on Friday, which was far slower than the 0.4% in the fourth quarter and much worse than the slip to 0.3% that had been forecast. It was the weakest quarterly growth since the end of 2012.

This initial estimate from the ONS showed the UK economy growing at its slowest pace in more than five years due to a significant fall in construction output, weaker manufacturing growth and continued subdued growth for consumer-facing services.

While industrial production growth accelerated to 0.7% from 0.4%, construction fell outright 3.3% and services sector growth slowed to 0.3% from 0.4%.

Snow and other bad weather from the 'Beast from the East' during the quarter had a relatively small overall impact across the UK.

UK consumer confidence has wobbled in April as the public's continued economic uncertainty outweighed softening inflation and improving wage growth.

The consumer confidence index from GfK fell by two points to -9 for April, the 28th consecutive months without a positive reading as four of the five measures dropped off.

"The last positive was in January 2016. Hope springs eternal for better numbers but the continued uncertain economic forecast means that the sun is not yet shining brightly for UK consumers," said Joe Staton, client strategy director at GfK.

Survey respondents' perceptions of past 12 months for their person financial situation and the general economic situation fell by four points and three points respectively to -1 and -29.

Looking forward, despite the recent data showing an easing of household pressures as wages rose faster than inflation, the possibility of a Bank of Interest rate hike has seen the perception of personal financial situation drop by six points to +4.

The perception of the general economic situation worsened two points to -24.

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