- David Kern, chief economist at the British Chambers of Commerce
The UK economic output rose in line with expectation in the first three months of 2015, marking the lowest growth rate since the fourth quarter of 2012. The British GDP expanded 0.3%, whereas economists had hoped that the Office for National Statistics would revise its growth estimate to 0.4%, when announcing its second reading of data. The Bank of England expects the final revision to show the nation's economy expanded 0.5% during the March quarter and believes growth will accelerate during the three months through June. Economic growth stalled due to the service sector performing worse than previously thought, as well as a widening trade deficit. Manufacturing and construction, which were slightly revised upward, failed to offset a gloomier performance of the services sector, Britain's key growth engine, which accounts for almost 80% of the economy. Trade was also a strong downside contributor to growth, as imports, particularly of oil and machinery, increased at a faster rate than exports. The data also confirmed the economy grew 2.4% over the year to the first quarter, also missing expectations of an upward revision to 2.5%. The ONS also said that UK GDP grew by 2.8% in 2014, compared with 2013.
In a separate release, the ONS said business investment on the quarter performed better than expected, surging 1.7%, which is the highest since the second quarter of 2005.
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