Britain's economy lost steam in the first three months of 2015, expanding at its slowest pace in over two years, as the country's crucial service sector performed weaker than predicted. But economists remain upbeat.
Unrevised official figures released by the Office for National Statistics (ONS) on Thursday showed that GDP expanded by just 0.3 percent in the first quarter, confirming an initial estimate that many economists and the Bank of England (BoE) had first dismissed as being too bleak.
The slowdown marked a somewhat surprising turn for Europe's second-largest economy, which grew at double the rate in the previous quarter.
Just a blip
But many economists brushed off the disappointing numbers as just a bump in the road, rejecting concerns that the UK's recovery is losing momentum.
"We remain optimistic ... that the UK economy is probably already back on track again," said Vicky Redwood from consultants Capital Economics.
This optimism was fuelled by ONS data confirming that Britain's economy grew by 2.8 percent last year - its fastest rate since 2006 and more than any other G7 member.
"Today's figures confirm that the UK was the fastest growing major European economy over the past year," a Treasury spokesman said.
But, he added: "While it is good news that the economy continues to grow, the job is not done and we must go on working through the plan that's securing a better economic future."
Last week, the BoE said it expected GDP to expand by 2.5 percent this year.
Out of balance
Improvements in the industrial production and construction sectors couldn't make up for weak demand in the transport and communications sectors. However, it was the anaemic performance in the services sector, which represents more than three-quarters of UK output, that proved the biggest drag on economic growth.
But it was the surge in imports - fuelled by cheap oil prices, machinery and "transport equipment," including cars - which gave analysts the biggest headache on Thursday.
"The economy is being driven again by consumers, and ... the unbalanced pattern of growth is likely to result in a slower expansion of GDP in 2015 than many have been expecting," said Chris Williamson, chief economist at financial data firm Markit.
Net trade shaved 0.9 percentage points of the quarterly GDP rate, the ONS data showed - the biggest dive since mid-2013.
pad/sri (AFP, Reuters)