It was well down on the 0.4 per cent expansion at the end of 2017 and the weakest quarterly growth rate recorded since 2012
The UK economy almost stalled in the first quarter of 2018 growing by just 0.1 per cent, the Office for National Statistics reported on Friday.
This was down from the 0.4 per cent expansion registered in the final quarter of 2017 and well below the 0.3 per cent City of London analysts had expected.
It was also the weakest quarterly growth rate since 2012.
The pound slumped in the wake of the data, dropping to $1.3804, down 0.8 per cent on the day, as traders bet against a May interest rate from the Bank of England due to the unexpected weakness of GDP.
The Bank had pencilled in a 0.3 per cent GDP expansion for Q1 in its most recent Inflation Report.
“The downside surprise in Q1’s GDP figures is probably the final nail in the coffin for the chance of an interest rate hike in May,” said Mark Hollingsworth of Capital Economics.
The UK was hit by severe bad weather in February and March, but the ONS said that snow disruption could not explain all the fall in growth.
Weakest since 2012
The agency reported that services, which account for 80 per cent of the economy, grew by 0.3 per cent in the three months to March, a slowdown from the 0.4 per cent rate in the previous quarter.
However, it estimates that construction output, around 6 per cent of output, slumped by a massive 3.3 per cent.
Manufacturing output, around a tenth of the economy, eked out growth of 0.2 per cent, well down on the 1 per cent plus growth rates recorded by the sector in the second half of 2017.
The UK’s annual rate of growth in Q1 dropped to just 1.2 per cent, down from 1.4 per cent previously, and the weakest since the second quarter of 2012.