Economy’s growth significantly slower in first quarter

The rate of growth in the UK economy slowed in the first three months of 2017.

The first estimate from the Office of National Statistics showed GDP rose 0.3% in January-March – the 17th consecutive quarter of growth.

However it was the lowest growth for a year, and significantly behind the revised estimate of 0.7% achieved in the final quarter of 2016.

Chris Williamson, chief business economist at IHS Markit, warned that the second quarter figure could be even lower.

He said: “A further lacklustre pace of growth is widely expected for the second quarter as political uncertainty and rising prices subdue demand. However, an improvement in recent survey data suggests that a further slowdown is by no means a sure thing.”

The slowdown was driven by the services sector, which accounts for 79% of the weighting for GDP calculations, dropping from 0.8% to 0.3%. Agriculture and production also saw 0.3% growth.

Manufacturing data was slightly stronger, showing 0.5% growth for the period.

Louise Bennett, the chief executive of the Coventry and Warwickshire Chamber of Commerce, the drag on growth was to be expected “with everything that’s going on”.

“There is a lot of uncertainty – around the EU referendum result, around the fluctuations in the pound, around inflation and around our direction of travel in terms of Brexit” she added.

“The healthy news is that the economy is continuing to grow when many thought that might not be possible in light of Brexit.”