According to preliminary estimates, GDP slowed to 0.3% in Q1 2015 compared with growth of 0.6% in Q4 2014. Economists had predicted growth of around 0.5%.
Growth in business services and finance slowed from 1.3% in Q4 to 0.1% in Q1 2015. This was the main reason behind the reduction in services growth between the two quarters, according to the ONS.
However GDP was 2.4% higher in Q1 compared with the same quarter a year ago.
In Q1, GDP was estimated to have been 4.0% higher than the preeconomic downturn peak of Q1 2008. From the peak in Q1 2008 to the trough in Q2 2009, the economy shrank by 6.0%.
Helal Miah, investment research analyst at The Share Centre, commented:
“The Office for National Statistics reported this morning that the UK economy grew by 0.3% in the first quarter of 2015, which was a fairly significant miss from the consensus estimate of 0.5% and below the 0.6% of the previous quarter. These latest GDP numbers are a disappointment to the market and the weakest quarterly growth since the end of 2012.
“However, we do not believe that this reflects a change in the direction of economic growth and feel that these disappointing numbers reflect more temporary factors."
Andrew Hunter, co-founder of Adzuna, added:
“Growth continues to chug forward, but at a much more laboured pace than expected. GDP has missed the mark, as slipping construction and manufacturing sectors have contributed to a slowdown in growth. As a result, we are witnessing the weakest quarterly growth since the end of 2012. With the election on the horizon, this adds up to a surprisingly lacklustre performance, even though the uncertainty surrounding the next government may have contributed to this downturn, and construction figures are notoriously volatile.
“Instead, the first shoots of real wage growth – whose effects have been multiplied by low inflation – have supported growing consumer spending, which is currently propping up progress in the services sector. Advertised salaries have now reached £34,627, 8% higher than a year ago, meaning workers now have much more cash in their pockets. And putting the UK in the context of the global recovery also puts the GDP figures into a better light. Even with the most recent dip, the UK grew at the fastest pace of all the G7 countries over the last year.”
