THE UK’S domestic economy grew rapidly at the start of the year, but a drop in demand from abroad dampened exports and overall growth.
The Office for National Statistics’ (ONS) second estimate of GDP said the economy grew by only 0.3 per cent over the first three months of the year – equal to the first estimate that was widely expected to be revised upward.
It is down from 0.6 per cent growth in the final three months of 2014, and is the lowest pace of expansion since 2012.
Economist Vicky Redwood from Capital Economics said the lack of an upward revision was “disappointing”, but added that “the domestic economy looks fairly healthy”.
She believes the economy will grow close to three per cent this year.
“As the domestic recovery continues and the euro area economy gradually picks up, we would expect to see stronger UK GDP growth later this year,” said John Hawksworth, chief economist at financial services giant PwC.
Imports surged by 2.3 per cent, the ONS said, while exports declined by 0.3 per cent. Net trade knocked a massive 0.9 percentage points off growth.
ONS chief economist Joe Grice said “It confirms the picture of somewhat weaker growth in the first quarter than in recent ones. But no single quarter’s figures should be given undue weight.”
Economist Ross Walker from RBS warned the UK should not get complacent over the strength of the UK economy, due to the weakness in nominal GDP growth. The money value of GDP is a better guide to UK demand conditions than real (inflation adjusted) GDP, he said.