- Vicky Redwood, chief UK economist at consultancy Capital Economics
Britain's economy slowed more sharply than expected in the beginning of the year, challenging UK's Prime Minister David Cameron, who heads for re-election campaign next week. Gross domestic product grew by 0.3% in the first quarter, according to the Office for National Statistics, the slowest quarterly growth since the end of 2012. Economists, however, had expected a marginal slowdown to 0.5%. The main downside drag came from the UK services sector, which accounts for 78.4% of the nation's economic output. The sector expanded 0.5% compared with the last quarter's increase of 0.9%. In addition to that, production declined for the first time since the fourth quarter of 2012, posting a drop of 0.1%.
Measured on an annual basis, GDP was 2.4% higher in the first quarter. It is now 4.0% bigger than its peak before the financial crisis, and 8.4% larger than when Cameron's Conservative-led coalition came to power in May 2010. The first estimate is based on less than 50% of all the data available and includes only figures on the output side of total GDP. Therefore, the headline figure is subject to revisions and economists warn against reading too much into the data. Yet, despite disappointing figures, most economists expect the economy to keep its momentum in 2015 following last year's growth of 2.8%, which was the strongest among the Group of Seven industrialised nations.
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