The UK economy grew by just 0.2 percent for the first quarter of 2017, according to the latest figures from the Office of National Statistics (ONS).
This proves a marked decrease from the 0.7 percent growth recorded for the previous quarter, with UK consumer confidence hitting at the lowest level since after the Brexit vote.
Darren Morgan, head of GDP at the ONS, commented:
“GDP growth for the first three months of 2017 remained unrevised at 0.2%. Growth was driven by business services and construction, partially offset by declines in some consumer-focused industries, such as retail sales and accommodation.”
In addition, he commented on savings ratio which had also fallen considerably:
“The saving ratio has fallen again this quarter to a new record low, partly as a result of higher tax payments reducing disposable income. Some of the fall could be as a result of the timing of those payments, but the underlying trend is for a continued fall in the saving ratio.”
“Services output in April was up slightly on the month, with the largest contribution to the month-on-month growth coming from the retail trade.” He added.
This follows research by Eurostat which revealed that the UK economy was among the slowest growing in Europe, on par with Italy.
The figures come ahead of the Bank of England’s decision in August on whether or not to hike up interest rates.
On Wednesday, Governor of the Bank of England Mark Carney hinted that the continued growth in the UK economy may prove a factor in deciding whether to reverse the emergency quarter-point cut in interest rates that occurred in the aftermath of last year’s referendum vote.
Despite an evident slow in growth for the UK economy, according to the latest figures the U.K deficit fell to £6.7 billion in May, in a somewhat encouraging development for the Treasury.
Amid the announcement of UK GDP figures, the pound has dipped below $1.30.