UK economic growth slows in first quarter

27th April 2016, Comments 0 comments

Britain's economic growth slowed in the first quarter of the year, hit by a heavy drop in construction and manufacturing, official data showed on Wednesday.

Gross domestic product (GDP) -- the total value of all the goods and services produced in the economy -- grew by 0.4 percent between January and March, the Office for National Statistics (ONS) said in an initial estimate.

That tallied with market expectations but marked a slowdown from 0.6-percent expansion in the fourth quarter of 2015.

Construction output sank by 0.9 percent, while the manufacturing industry contracted 0.4 percent compared with a 0.1 percent rise in the previous quarter.

On a brighter note, Britain's services sector -- which accounts for almost 80 percent of the economy -- expanded by 0.6 percent.

"Today's figures suggest growth has slowed as compared with the pace up to the middle of last year," said ONS chief economist Joe Grice.

"Services continue to underpin the economy but other sectors have shown falling output this quarter."

Britain meanwhile faces mounting uncertainty over a looming EU membership referendum on June 23.

"It's important to remember this is only the first estimate of GDP, and does not include factors like investment and trade, which would be most likely to be hit by referendum-related uncertainty," noted Hargreaves Lansdown economist Ben Brettell.

"Weaker construction and production output are the primary reasons for the slowdown, which could prompt concerns that the UK economy's reliance on the services sector is increasing further," he added.

© 2016 AFP

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