UK GDP Drops more than expected - Sterling Rates all down over at least 0.5%
The UK economy registered a severe slowdown in the first quarter, its weakest reading in five years, official preliminary data showed on Friday. In a report, the Office for National Statistics (ONS) said gross domestic product expanded by a seasonally adjusted 0.1% in the first three months of the year, below forecasts for growth of 0.3%.
That was the weakest reading since the fourth quarter of 2012 and marked a severe slowdown from growth of 0.4% in the final three months of 2017. Year-over-year, UK economic growth expanded 1.2% in the first quarter, missing expectations for a repeat of the prior quarter’s 1.4% gain. Additionally, the index of services in the U.K. rose 0.4%. That missed expectations for a repeat of the fourth quarter’s 0.6% advance.
The ONS noted that snow had some impact on economy, especially in construction and some areas of retail, but remarked that the overall effect on GDP was limited.
The pound weakened after the publication as the weak growth reading has lowered the possibility of the Bank of England moving ahead with a rate hike at its meeting on May the 10th.