UK economic growth confirmed at 1.8% in Q1; current account deficit widens

The UK's first-quarter economic growth was confirmed at 1.8% on Friday compared to the same quarter of last year, according to the Office for National Statistics.

Quarter-on-quarter, GDP was up 0.5%, in line with consensus.

Rob Kent-Smith, head of GDP at the ONS, said: "GDP grew solidly and was unrevised in the first quarter of 2019, with manufacturing seeing strong growth due to orders being brought forward ahead of the UK’s original EU departure date.

"Household saving has been historically low for 18 months, following a marked drop off in non-pension saving in recent years."

Other figures from the ONS showed that the UK current account deficit rose to its highest level in the first quarter since 2016, driven by gold imports.

The deficit widened from £23.7bn in the fourth quarter of last year to £30bn, which is equivalent to 5.6% of GDP.

Capital Economics economist Andrew Wishart said: "That was mainly due to a widening in the trade deficit. But as this was mainly due to a large import of unspecified goods, in particular gold bullion, most of which will probably be reversed in Q2. It may have also been partly due to activity being brought forward ahead of Brexit."

He added: "Overall, these figures are largely old news and showed that the economy was on a temporary high in Q1 due to activity being brought forward ahead of the original Brexit deadline. As a result, the economy will hit a temporary low in Q2. But averaging this out, the underlying trend may not be too bad."