The UK economic growth rate slowed by 50% in the first 3 months of 2015 making it the slowest quarterly economic growth in two years.
In the United Kingdom, the economic growth rate halved in the first three months of 2015 ending in March; these are the official figures that mark the slowest quarter for 2 years. The economy in the UK only grew by 0.3 percent in the quarter, says the ONS (Office for National Statistics). In the last quarter of 2014, the economic growth was higher at 0.6%.
Analysts say that the figures showed a temporal economic slowdown and this data comes just 9 days prior to general elections. The ONS also indicated that the economy last year in the same period was 2.4% greater.
Although the services industry grew by a mere 0.5%, the construction industry dropped by 1.6%. The service sector in the UK accounts for about three quarters of total economic growth and the remaining quarter is made up of manufacturing, production and construction.
George Osborne, the Chancellor, said that it’s positive news that economic growth has continued; however, this moment now is critical. He further said that the ballot paper at the upcoming election holds the future of the economy.
No one can quite explain why Britain’s construction industry has been down for the past six months. Leading to somewhat of a crisis in the North Sea, the productions industry dropped based on the collapse of the oil price. Growth quarter on quarter would be 0.1% higher at 0.4% if oil and gas were excluded.
Manufacturing has also not managed to impress as growth was a mere 0.1%. Attributed to a stronger pound (GBP), manufacturing growth declined from 1.4% last year.
Also not showing great results in the last few months is the services industry in which the UK is seen as world leaders; this includes architecture, finance, and engineering.
Some indication of trouble ahead is the slowing growth based on the demand for UK goods and services in significant export markets – particularly the US and China, which could be worse than the official numbers show.
That said, the UK can be thankful for its domestic services because contributing to the very small growth are the nation’s restaurant eaters and shoppers. In the quarter, hotels and restaurants increasing by 1.2 percent showed a small decline from the last quarter in 2014.
However, the figures only portray an initial estimate of the growth in the economy and are a reflection of less than 50% of all the data required for final estimated output. The ONS, however, added that although the estimates are subjected to further revision as data becomes more available, minor revisions are usually seen between preliminary and 3rd estimates.