Written by: Keith Tully
Reviewed: Monday 1st June, 2015
Growth in the UK economy slowed to 0.3 per cent during the first quarter of this year, with the scale of exports and service sector output having fallen in the period.
According to official figures from the Office for National Statistics (ONS), GDP across the country grew by 0.3 per cent in the three months to the end of March, which represents a sharp fall from the 0.6 per cent recorded for the final quarter of 2014.
A particularly negative reading reported by the ONS this week was that of only a 0.4 per cent increase in service sector output in the first quarter.
The service sector is the largest single contributor to economic activity levels throughout the country and the 0.4 per cent growth rate is the slowest recorded since 2012.
Other unwelcome indicators to emerge from the ONS’ latest figures included numbers relating to the balance of imports and exports.
According to the data, growth in the value of goods being exported out of the UK fell by 0.3 per cent in the first quarter, while the value of goods being imported increased by 2.3 per cent.
There had been hopes among financial analysts that the official data on growth in the UK economy in the first quarter might have been revised upward but that has not been the case with the ONS sticking by its initial estimates.
Putting a positive spin on the situation, David Kern, chief economist at the British Chamber of Commerce, insisted that the headline growth figure of 0.3 per cent for the first quarter “understates the true momentum in the economy”.
“It is clear that the foundations for a sustainable recovery are being laid,” a Treasury spokesperson said in response to the release of the ONS figures. “While it is good news that the economy continues to grow, the job is not done and we must go on working through the plan that's securing a better economic future.”
Vicky Redwood, chief UK economist at Capital Economics, said: “We remain optimistic that Q1's slowdown was just temporary and that the recovery is probably already back on track again.”