— Kallum Pickering, Berenberg
The British economy expanded at a weaker-than-initially-expected pace in the three-month period to March, official figures revealed on Thursday. The Office for National Statistics reported that the economy grew at a seasonally adjusted quarterly pace of 0.2% in the first quarter, the slowest pace of growth since the beginning of 2016, compared to an originally reported 0.3% expansion pace. Meanwhile, market analysts expected the March quarter's pace to remain unchanged. A fall in the services sector contributed the most to the following slowdown, with retail and accommodation posting the largest drops amid the post-Brexit vote sharp fall in the value of the British Pound. Furthermore, household consumption rose just 0.3% quarter-over-quarter in the Q1, the weakest since the Q4 of 2014, as inflationary pressures boosted import prices. Household consumption account for about 70% of Britain's GDP growth. The final GDP estimate for the Q1 will be released next month. Thus, the reading could be revised higher or lower. However, it was the first time in four years that the second estimate was revised down.
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