UK GDP Grows 0.4% in Q1 ahead of Brexit Vote


The UK’s economy expanded 0.4 percent on quarter in the first three months of 2016, in line with preliminary estimates and slowing from an upwardly revised 0.7 percent expansion in the last quarter of 2015. Consumer spending was the main driver of growth while business investment shrank more than expected and exports declined the most in six quarters, final figures showed.

Household spending advanced 0.7 percent, the same as in the second estimate and higher than a 0.6 percent growth in the previous quarter. Government spending increased at a faster 0.5 percent, higher than a 0.4 percent rise in the second estimate and 0.2 percent in the previous period. Consumption of nonprofit institutions serving households also increased at a faster 1.7 percent (0.3 percent in the second estimate and 0.5 percent in the previous period). 

In contrast, gross fixed capital formation fell 0.1 percent, compared to a 0.5 percent growth in the second estimate and a 1 percent drop in the previous quarter. The main contributor to the fall was investment in other buildings and structures and transfer costs, down 4.6 percent (-0.7 percent in the second estimate). Business investment declined more than anticipated by 0.6 percent compared to a 0.5 percent decline in the second estimate.

Exports shrank 0.4 percent, more than initially estimated (-0.3 percent) and following a 3.2 percent jump in the previous quarter. It is the biggest decline since the third quarter of 2014 when sales declined 1.3 percent. Imports edged up 0.1 percent, much less than an earlier estimate of a 0.8 percent growth and a 2.5 percent rise in the previous period. As a result, the trade deficit widened to a one-year high of GBP 14.1 billion. 

On a yearly basis, the UK's economy expanded 2 percent, also in line with earlier estimates and compared to a downwardly revised 1.8 percent growth in the previous period. 

UK GDP Grows 0.4% in Q1 ahead of Brexit Vote


ONS | Joana Taborda | joana.taborda@tradingeconomics.com
6/30/2016 11:38:14 AM