Press Release (ePRNews.com) - TAIPEI CITY, Taiwan - May 29, 2018 - In the first quarter of this year, the U.K.’s economy expanded at its slowest pace since 2012 prompting Burton Mills economists to question whether the Bank of England would go ahead with this month’s interest rate hike as planned.
Recent official data showed that in the first three months of 2018, the U.K.’s economy expanded by only 0.1 percent which was far below the Bank of England’s predicted growth of 0.3 percent.
Burton Mills economists say such weak growth in the first quarter drastically reduced the chance of an interest rate increase this month and could mean no rate hike at all for this year.
On an annual basis, expansion fell from 1.4 percent to 1.2 percent, making the first quarter of this year the slowest growing since the second quarter of 2012. Burton Mills economists say that if this rate of growth were to persist, it would keep the U.K. lagging far behind its economic peers.
A spokesperson for Prime Minister Theresa May said that the data was somewhat disappointing but did not blame uncertainty over Brexit for the lack of growth in the first quarter.
Burton Mills economists say the decline in growth from an already muted 0.4 percent in the final quarter of last year was largely due to a drop in construction productivity.
Towards the end of February and at the beginning of March, unseasonably snowy weather damaged retail sales and affected last week’s data but Burton Mills economists believe the problem extends beyond this.
According to the data, growth in consumer-driven businesses also slowed in the first three months of 2018 and Burton Mills economists believe this could be attributed to higher inflation.
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