NIESR says GDP to slow in blow to the coalition

The UK’s gross domestic product (GDP) grew at 0.6% quarter–on-quarter pace in the first quarter of 2015, according to a prestigious think-tank.

The National Institute for Economic and Social Research (NIESR) said its estimate suggested “that the recent weak performance in the production and construction sectors have weighed down on economic growth in the first quarter by approximately 0.15 percentage point.”

That came as economists at RBC reportedly lowered their view for Britain’s GDP growth in the first quarter to 0.5%.

Earlier in the day figures from the Office for National Statistics (ONS) revealed growth of just 0.1% month-on-month in the UK’s industrial production in February, as a sharp reduction in oil and gas output offset a rebound in manufacturing.

The 0.9% drop in construction output was the fourth in five months.

With industrial production essentially flat in the first quarter Britain’s GDP was likely to have moderated its pace of growth from the 0.6% clip registered in the last quarter of 2014, according to Dr. Howard Archer, chief UK+European at IHS Global Insight.

“Given that the first quarter GDP data will be released at the end of April, this would be very unwelcome news for the Conservatives and Liberal Democrats so close to the general election given their hopes that many undecided voters will ultimately decide to reward them for the economy’s improvement,” Dr.Archer said.

As of 16:34 cable was lower by 0.5% at 1.4643.