Economic growth slows to 0.3%

growth slows down as PM insists the job is not finished
Prime Minister David Cameron giving a speech about the economy at the Institute of Chartered Accountants in Moorgate, London. PRESS ASSOCIATION Photo. Picture date: Monday April 27, 2015. See PA story ELECTION Tories. Photo credit should read: Chris Radburn/PA WirePrime Minister David Cameron giving a speech about the economy at the Institute of Chartered Accountants in Moorgate, London. PRESS ASSOCIATION Photo. Picture date: Monday April 27, 2015. See PA story ELECTION Tories. Photo credit should read: Chris Radburn/PA Wire
Prime Minister David Cameron giving a speech about the economy at the Institute of Chartered Accountants in Moorgate, London. PRESS ASSOCIATION Photo. Picture date: Monday April 27, 2015. See PA story ELECTION Tories. Photo credit should read: Chris Radburn/PA Wire

Britain experienced a sharp slowdown at the start of the year as growth slipped to a worse-than-expected 0.3%, official figures showed today.

The pace of gross domestic product (GDP) growth in the first quarter was half the 0.6% rate seen in the final quarter of 2014, a pre-election setback for Coalition parties.

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It was the weakest quarterly growth since the end of 2012. The data comes just nine days before the General Election as politicians vie to demonstrate their competence in running the economy.

David Cameron has insisted the figures were a sign the economic recovery work was not complete.

“They show that we cannot take recovery for granted, we cannot take growth for granted,” the Prime Minister said. “All of this is at risk in nine days’ time.”

But shadow chancellor Ed Balls said: “While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families.

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“Tory economic policy may be helping a few at the top but for most people bills have gone up faster than wages, which are down £1600 a year since 2010. And now these disappointing figures show economic growth slowing down too. The Tories just don’t understand that Britain only succeeds when working people succeed.

“Working families can’t afford another five years of the Tories. Labour’s better plan will put working people first, make our economy stronger and ensure the recovery reaches everyone in every part of the country.”

The preliminary estimate published by the Office for National Statistics (ONS) showed the dominant services sector grew at its slowest pace in almost two years.

Meanwhile, the construction sector shrank for the second quarter in a row - the first time this has happened since 2012.

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Industrial production also shrank slightly, squeezed by a decline in North Sea output amid lower oil and gas prices, though within production manufacturing edged up.

ONS chief economist Joe Grice said: “The economy expanded a little more slowly in the first quarter of 2015 than we’ve seen in the past two years and that’s largely due to the services sector, where growth has eased to 0.5%.

“In addition, there has been a further fall in construction output that itself takes around 0.1% off the GDP growth rate. But, as always, we warn against reading too much into one quarter’s figures.”

Chancellor George Osborne wrote on Twitter: “GDP up 0.3%, 2.4% on year. Good news economy continues to grow but this is a critical moment & reminder you can’t take recovery for granted.

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“GDP figures show future of the economy is on the ballot paper. We should stick to the plan that’s delivering a brighter more secure future.

“With rising instability abroad, now is worst possible time to vote for instability at home.”

Today’s ONS figures showed the main factor in the slowdown of the key services sector was business services and finance, which edged up only slightly after a strong end to 2014.

The construction sector shrank by 1.6% in the first quarter after a 2.2% fall in the previous three months.

Industrial production shrank by 0.1% but within this manufacturing was up by 0.1%.