Economic growth the slowest for 12 months, says ONS
Growth in the UK economy slowed in the first quarter of 2017 to 0.3%, the lowest rate of GDP expansion for 12 months.
According to the Office for National Statistics (ONS), activity in construction rose by 0.2% in the first quarter, down on 1% in the three months to December 2016.
The overall growth slowdown was in large part due to the lower contribution from services – notably retail trade and accommodation services – which fell from 0.8% in the previous three months, to 0.3%.
Rising inflation hit prices, the ONS said, exacerbating the decline in services.
Rain Newton-Smith, the CBI’s chief economist, said the weakness in consumer-facing services chimed with signs that some of the recent supports to growth were softening.
“In particular, real wage growth has deteriorated, as inflation is now running up against earnings growth. With inflation set to continue rising, the pressure on household incomes will weigh on consumer spending.
“As the UK looks to redefine its role in the world, the next government must deliver an industrial strategy that build on our already solid foundations.”