United Kingdom: Economic expansion continues in Q1 2014
April 29, 2014
In Q1, GDP expanded a seasonally-adjusted 0.8% over the previous quarter according to a preliminary estimate released by the Office for National Statistics (ONS) on 29 April. The increase came in a notch below market expectations of a 0.9% expansion, although this did mark an improvement over the 0.7% rise recorded in the last quarter of 2013.
Q1's result was mainly driven by expansions tallied in the service and industry sectors. The strong expansion in services continued in the first quarter, growing 0.9% over the previous month, which was up from the 0.8% rise tallied in Q4. Industry expanded 0.8% in Q1, which was up from the 0.5% tallied in the last quarter of 2013. The expansion recorded in the industrial sector represented the strongest since Q2 2010. Construction rebounded in the first quarter and expanded 0.3%, which contrasted the 0.2% drop tallied in the previous quarter. Conversely, agriculture registered the sharpest contraction since Q1 2013, falling 0.7%, which contrasted the 0.2% expansion recorded in Q4 2013.
In annual terms, GDP growth increased from 2.7% in Q4 2013 to 3.1% in the first quarter, which marked the fastest pace of growth since Q4 2007.
In its latest inflation report from February, the Bank of England (BoE) projected that the economy would grow 3.4% in 2014 and 2.7% in 2015. FocusEconomics Consensus Forecast panelists expect the economy to grow 2.5% in 2014, which is unchanged from the previous month's estimate. The panel sees GDP expanding 2.2% in 2015.