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UK economy in weakest growth since 2012

UK economy in weakest growth since 2012

The impact of the 'Beast from the East' weather front was "relatively small", the ONS said
The UK economy grew at its slowest rate since 2012 in the first quarter of the year, the Office for National Statistics (ONS) has said. GDP growth was 0.1%, down from 0.4% in the previous quarter, driven by a sharp fall in construction output and a sluggish manufacturing sector.The ONS said the extreme weather of February and March had had a "relatively small" impact.Sterling fell sharply as the chances of an interest rate rise in May decreased. Following the news it was down around a cent against the dollar at $1.380.
Rob Kent-Smith, head of national accounts at the ONS, said: "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."While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited with the bad weather actually boosting energy supply and online sales."
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Construction was the biggest drag on GDP, having experienced its most dramatic fall since the second quarter of 2012 - falling 3.3% over the first three months of the year.Manufacturing growth slowed to 0.2%, though that was partially offset by a rise in energy production due to the colder weather.Consumer spending has also been squeezed by a combination of higher inflation and slow wage growth.Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the results meant the Bank of England was highly unlikely to raise interest rates in May as some economists had expected. "The chance of a May rate hike is now close to zero following the slowdown in GDP growth in the first quarter" he said. "With inflation falling much more rapidly back to its target than the Monetary Policy Committee expected and wage growth still not building momentum, the MPC has the luxury of being able to delay raising interest rates in May."
Office for National Statistics
UK economy
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