United Kingdom GDP Q1 2016

United Kingdom

Economy decelerates in the first quarter

In the first quarter, GDP expanded a seasonally-adjusted 0.4% over the previous quarter, according to a preliminary estimate released by the Office for National Statistics (ONS) on 27 April. The print was slightly down from the 0.6% increase recorded in the previous quarter.

In the first quarter, the agricultural sector deteriorated from a 0.3% expansion in the fourth quarter to a 0.1% contraction. Moreover, the construction sector contracted 0.9% on a sequential basis, which contrasted the 0.3% increase tallied in the previous quarter. Conversely, the service sector expanded 0.6% in the first quarter, thus positively contribution to Q1’s growth. Nevertheless, Q1’s expansion in the service sector was slower than the 0.8% increase observed in the previous quarter.

In annual terms, GDP expanded 2.1%, which met the previous quarter’s growth and remained at the lowest reading since Q1 2013.

In its latest inflation report from November, the Bank of England projects that the economy will grow 2.5% in 2016 and 2.6% in 2017. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.3% in 2016, which is unchanged from the previous month’s estimate. The panel sees GDP expanding 2.2% in 2017.

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United Kingdom GDP Chart

United Kingdom GDP Q4 2015 0

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %.
Source: Office for National Statistics (ONS) and FocusEconomics Consensus Forecast.

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