Schroders ' Senior European Economist, Azad Zangana, comments on today's revised UK GDP figures for the first three months of the year, which revealed a greater than expected slowdown in the UK economy.
"Household consumption was one of the main contributing factors, with growth slowing from 0.7% to 0.3%. However, net trade was also a disappointment, with the balance reducing GDP by 1.4 percentage points. The volume of exports fell 1.6% from a very strong 4.6% in the previous quarter. Meanwhile, imports jumped by 2.7%, compared to a 1% fall previously.
"There was some good news in the figures. Business investment was higher than expected, while government spending also picked up by more than expected. However, it is worth mentioning that had inventories not picked up through the quarter, the economy would have stalled.
"Overall, a weak set of figures, highlighting the challenge that households are facing: weak pay growth that is not keeping up with inflation. What makes matters worse is that inflation is still rising, and this period of weakness could persist for some time."
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