UK economic growth is slowing
According to the ONS, the UK economy grew by just 0.3% in the first quarter of the year.
It grew by 0.6% in the final quarter of last year and 0.7% in the third quarter of 2014.
The UK remains the fastest growing economy in the G7 group of countries, with annual growth of 2.7% compared to a year earlier.[tweet_box]Why is UK economic growth slowing down? @InformedChoice explain. [/tweet_box]
The service sector grew by 0.5% in the first quarter, although this was offset by a 1.6% reduction in output from the construction sector.
Analysts believe these new figures represent a ‘temporary’ slowdown. Quarterly economic growth is expected to return to between 0.7% and 0.8% later in the year, according to Vicky Redwood, who is chief UK economist at Capital Economics.
Commenting on the figures, which come a little over a week before the General Election, chancellor George Osborne said:
“It’s good news that the economy has continued to grow, but we have reached a critical moment. Today is a reminder that you can’t take the recovery for granted and the future of our economy is on the ballot paper at this election.”
Shadow Chancellor, Ed Balls responded: “While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families.”
The figures published today represent a first estimate of UK economic growth in the first quarter of the year. These estimated figures will be revised twice, based on more complete sets of data, before a final growth figure is published.
It is typical for the first estimate of economic growth to be revised by up to plus or minus 0.1% by the time the final figures are released by the Office for National Statistics.
According to ONS chief economist Joe Grice:
“The economy expanded a little more slowly in the first quarter of 2015 than we’ve seen in the past two years and that’s largely due to the services sector, where growth has eased to 0.5%.
“In addition, there has been a further fall in construction output that itself takes around 0.1% off the GDP growth rate. But, as always, we warn against reading too much into one quarter’s figures.”
It will be interesting to see what impact, if any, these new economic figures have on election polling ahead of the General Election next Thursday.