The British economy slowed sharply in the first quarter of the year, official figures showed Friday, in a development that has reined in expectations that the Bank of England will raise interest rates again next month.
In its preliminary estimate of what went on during the January to March period, the Office for National Statistics found that quarterly growth slowed down to 0.1 percent, its lowest since the end of 2012, from 0.4 percent in the previous three-month period.
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A slowdown had been expected in light of cold and snowy conditions during much of the quarter, but the scale of the decline was a surprise and prompted a sharp fall in the value of the pound. It was down 0.7 percent at $1.3822, and near seven-week lows.
Though the agency said the weather conditions, largely associated with what became termed the “Beast from the East” that hit Britain in late February and much of March were “generally small,” they clearly impacted on the construction sector, the main drag to growth. Construction output fell by 3.3 percent during the quarter.
The slowdown is likely to raise concerns about the state of the economy less than a year away from the country’s exit from the European Union, and dampen expectations that the Bank of England will raise interest rates again next month.
