Britain’s economy grew at a slower pace than expected in the first three months of this year, as the harshest winter weather in 30 years hit retail and industrial production, official data showed yesterday.
The Office for National Statistics said that GDP grew 0.2 percent in the first quarter, half the 0.4 percent rate forecast by analysts, who had expected a continuation of the pace of growth seen in the last three months of last year.
The figures are likely to reinforce the Labour Party’s view that the economic recovery remains too fragile for fiscal tightening of the scale being proposed by the opposition Conservatives ahead of a May 6 national election.
The figures will also reinforce expectations that the Bank of England will hold interest rates at their record low rate of 0.5 percent until the strength of the recovery becomes clearer.
Year-on-year, GDP contracted by 0.3 percent, the smallest decline since the third quarter of 2008.
The statistics office said there was anecdotal evidence that harsh winter weather, the worst in 30 years, depressed output from the retail sector and industry.
Nonetheless, the 0.7 percent increase in industrial output on the quarter was the strongest in four years. Within that, manufacturing grew 0.7 percent, slightly down on the 0.8 percent growth in the fourth quarter, and utilities output grew 2.5 percent, its highest since the end of 2007.
Distribution, hotels and restaurants — which includes retail — contracted by 0.7 percent, the biggest drop since the first quarter of last year.
However, business services and finance grew 0.6 percent, its best performance in two years, accounting for the lion’s share of total GDP growth in the first quarter.
The overall service sector expanded by less than half its pace in late 2009, growing by just 0.2 percent.
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