By Max Clarke
The Office for National Statistics has confirmed that the economy grew by 0.5% in the first quarter of this year, unrevised from the figure released last month.
Analysts, specifically Sunday Times economic journalist Robert Watts, had expected the figure to be revised upwards saying "the ONS has a clear track record of revising GDP growth up after the first quarter". This has not been the case.
The construction sector emerged as the economy’s laggard, dropping 4% over the quarter, though this figure was revised up from the ONS’ initial 4.7%.
Household expenditure predictably fell, as inflation and pay freezes continue to put pressure on household incomes.
There was some good news as the UK’s trade deficit narrowed to £5.7 billion, down from more than double that in the same quarter 2010.
“While it is good news that the figure is positive, the component parts are showing that the road is looking increasingly rocky for the UK," Jeremy Cook, chief economist at World First foreign exchange said.
“Consumer spending has fallen by the most since the 2nd quarter of 2009, decreasing by 0.6%, as the average consumer is hammered by price rises and fears over service and job cuts from the coalition government.
“Business investment is also down by 7.1%. Government spending also rose by 1% but we all know that we will be unable to rely on this over the next few years. The private sector is not stepping up yet.
“A bright spot are exports that are higher as businesses are taking advantage of the weak pound while imports are lower that may suggest a moderation of imported commodity inflation.”