It’s official: The UK has fallen to the bottom of the G7 for GDP growth

Bad news for Theresa May ahead of the election: the UK’s GDP growth puts it right at the bottom of the G7.

Growth figures published by Canada late last night confirmed what most economists already knew: the UK’s 0.2 per cent growth in the first quarter of this year put it next to Italy as the slowest-growing in the league table of the world’s advanced economies.

Canada came top of the ranking, with growth of 0.9 per cent, followed by Germany, which racked up growth of 0.6 per cent in the first quarter. That was followed by Japan’s 0.5 per cent; France, at 0.4 per cent and the US, at 0.3 per cent.

Figures published this morning hinted sluggishness in the UK economy may be here to stay, after house prices fell for the third consecutive month in May, the first time since 2009 prices have fallen continuously for a quarter.

Earlier this month official figures suggested consumers are facing increasing pressure, with inflation rising to 2.7 per cent, its highest level since September 2013.

And while UK unemployment reached a record high this month, with joblessness reaching its lowest since 1975, wage growth did not follow suit: average weekly earnings grew 2.1 per cent in the first quarter of the year, bad news for consumers.

However, forecasts by the Bank of England have suggested inflation will continue to rise, despite weak growth in wages.

“My hunch is that in 2017-18 we will see higher near-term inflation, plus a greater rotation of growth away from consumer spending and towards investment and net trade,” said Michael Saunders, a member of the rate-setting monetary policy committee, in forecasts published in April.