Britain’s economy suffered a sharp slowdown in the first quarter with the weakest growth rate since 2012, official data showed Friday in a gloomy sign one year before Brexit.
Gross domestic product expanded 0.1 percent in the three months to the end of March, the Office for National Statistics (ONS) said in a statement which highlighted falling construction work and sluggish manufacturing activity.
The initial estimate marked the slowest pace for more than five years and compared with expansion of 0.4 percent in the final quarter of 2017. The data also dashed market expectations for growth of 0.3 percent.
“Our initial estimate shows the UK economy growing at its slowest pace in more than five years, with weaker manufacturing growth, subdued consumer facing industries and construction output falling significantly,” said ONS spokesman Rob Kent-Smith.
After March 2019
The news sent the pound diving against the euro and the dollar, as analysts said it ruled out any remaining hope of an interest rate hike next month. Britain is meanwhile scheduled to leave the European Union in March 2019, after a shock Brexit referendum that was held almost two years ago.
“It’s a very concerning sign for the economy with just one year to go until Brexit,” XTB analyst David Cheetham told AFP. “This is the first full quarter since the BoE hiked in November and the early signs are not good,” he added.
“When you consider that there has been limited tangible progress on an acceptable Brexit deal in the near two-years since the referendum, it is all the more worrying as the deadline approaches.”
Recent data showed UK inflation unexpectedly slowed in March 2.5 percent -- the lowest level in a year -- undermining the urgency of raising rates.