UK GDP rises 0.3% in first quarter, less than forecast of 0.4%

UK gross domestic product rose 0.3% quarter-on-quarter in the first quarter, in line with the initial estimate, surprising analysts who expected a 0.4% increase, the Office for National Statistics revealed on Thursday.

The second estimate of first quarter year-on-year growth also remained unrevised from the previous estimate of 2.4%. Analysts had predicted a 2.5% gain.

"The lack of any upward revision to UK GDP in Q1 is a touch disappointing, but given the discrepancy between the weak GDP data and the more upbeat business surveys, a revision is still likely further ahead," said Vicky Redwood, chief UK economist at Capital Economics.

"Most striking is the big negative contribution of 0.9 percentage points (pps) from net trade – hardly good news from a rebalancing point of view. And the biggest positive contribution came from stockbuilding (+0.5pps), which is not generally considered a very sustainable source of growth. Nonetheless, the 1.5% quarterly rise in investment was good news. And despite fears about a consumer-led recovery, the 0.5% rise in consumer spending was relatively modest given the rebound in real incomes."