Weaker construction and production output are the primary reasons for the slowdown. Production output declined 0.4% and construction was down by 0.9%. The services sector was the only one to report growth, increasing by 0.6%.
Year-on-year GDP growth stood at 2.1%, marking the weakest Q1 for three years.
Earlier this month, the Treasury predicted that if Britain votes to leave European Union, overall GDP would drop by 6.2%.
Ben Brettell, Senior Economist at Hargreaves Lansdown, commented:
"UK economic growth slowed to 0.4% in the first quarter of 2016, in line with economists’ forecasts and down from 0.6% the previous quarter.
"Two weeks ago the Bank of England said that concerns about the EU referendum had begun to affect the real economy, and many commentators will view today’s GDP figures as evidence to support this hypothesis. However, it’s important to remember this is only the first estimate of GDP, and doesn’t include factors like investment and trade, which would be most likely to be hit by referendum-related uncertainty. Indeed the preliminary estimate of GDP is based on less than half of the data which will ultimately be available. Revisions to today’s figures are likely in the coming months.
"The bigger picture is that growth remains lacklustre, but reasonably resilient. Low energy and fuel prices should continue to aid the domestic consumer, but neither wage growth nor inflation look anywhere near strong enough for the Bank of England to consider higher interest rates, especially given the added uncertainty provided by June’s referendum."
