UK GDP: Pound sterling (GBP) falls after UK economy grows more slowly than expected in the first quarter

The UK economy grew more slowly than expected in the first quarter, with 0.1 per cent growth in GDP reported by the Office for National Statistics this morning.

UK quarterly growth was tipped to fall to 0.3 per cent from the 0.4 per cent recorded from October to December.

The 0.1 per cent growth in GDP for the first three months of 2018 came in as the weakest quarterly growth since the last three months of 2012.

The pound fell 0.8 per cent against the dollar on the news, dropping to $1.3817.

Read more: Bad weather will (temporarily) reduce UK GDP growth say forecasters

Despite the slower growth than expected, the ONS did not put the blame on the big snow troubles during the quarter.

Analysis from economists at PwC earlier this month said that GDP growth could fall as low as 0.2 per cent for the first quarter, down from 0.4 per cent at the end of last year.

The adverse weather in February and March – nicknamed the Beast from the East – caused large parts of the economy to grind to a halt after heavy snowfalls followed by flooding.

But the ONS said today that while snow had some impact on the first quarter GDP, particularly in construction and some areas of retail, it had “limited effect overall” and actually gave some boost to energy supply and online sales.

The largest downward pull on the first quarter result came from a 3.3 per cent fall in construction. While there was some evidence of an impact of the bad weather on construction output, the ONS said output had fallen across all three months of the quarter – not just during the period of bad weather.

The services industries were the largest contributor to GDP growth, rising by 0.3 per cent in the first quarter, though the longer-term trend is showing “a weakening in services growth”.

Read more: The UK is the world’s slowest-growing major economy, GDP stats confirm