UK GDP up 0.4% in the first quarter

Data from the Office for National Statistics showed UK gross domestic product increased by 0.4% in the first three months of the year, in line with the flash estimate and as expected.

Services grew 0.6% from January to March, while industrial output and construction were down 0.4% and 1%, respectively. Business investment, meanwhile, was estimated to have fallen by 0.5%.

On the year, the economy was estimated to have grown 2%, revised down 0.1 percentage points from the previous estimate and a touch below expectations for it to remain unchanged.

“The data show an economy reliant on consumer spending to sustain growth, with business investment, construction, manufacturing and exports all in decline,” said Chris Williamson, chief economist at Markit.

“The disappointing start to the year suggests the economy will struggle to attain 2% growth this year without a substantial rebound in the second half of the year, which in turn will of course largely depend on the EU referendum.

“It is tempting but wrong to assign all of the blame for the slowdown on ‘Brexit’ uncertainty. While business survey evidence indicates that rising uncertainty has caused growth to weaken in recent months, there has also been an underlying cooling in the economy which has been driven by slower global economic growth, which has slumped to the weakest for over three years in recent months.”