The U.K. economy slowed more sharply than first thought in the first quarter, according to a fresh estimate Thursday, a warning sign on growth ahead of a national election June 8 and the start of Brexit talks with the European Union.
The Office for National Statistics said its latest data suggest the economy expanded at a quarterly rate of 0.2% in the first quarter, a weaker pace of growth than the 0.3% preliminary estimate published last month and much weaker than the 0.7% pace notched up in the final three months of 2016.
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On an annualized basis, the economy grew 0.7%, compared to an earlier estimate of 1.2%.
Consumer spending was weaker than first thought, the ONS said, highlighting how rising prices and meager wage growth are squeezing household budgets. Trade also weighed on growth as imports outpaced exports, despite a weakened pound.
One bright spot was business investment, which rose a steady 0.6% on the quarter, the ONS said. Economists say corporate spending will need to pick up to keep the economy motoring as long as consumers retrench.
Recent business surveys and other data have suggested the economy may have recovered somewhat at the start of the second quarter following a soft start to the year.
Campaigning for June's election was due to resume Thursday after a brief suspension following Monday's deadly attack in Manchester, where a suicide bomber killed 22 and injured scores of others when he blew himself up outside an arena where young concertgoers were streaming out of an Ariana Grande show.
Write to Jason Douglas at firstname.lastname@example.org
(END) Dow Jones Newswires
May 25, 2017 04:50 ET (08:50 GMT)