British economic performance may be much better than the official preliminary estimates for first quarter growth suggest, the Confederation of British Industry said Tuesday.
Gross domestic product expanded 0.3 percent sequentially during the January to March period, the slowest growth since the fourth quarter of 2012, preliminary estimates from the Office for National Statistics revealed on Tuesday. The growth rate halved from 0.6 percent in the final three months of 2014.
“Growth slowed but checking the temperature with our members and surveys hints that the economy is more resilient than these figures might suggest,” CBI Director General John Cridland said.
“Prospects for this year remain bright, with lower oil prices and inflation continuing to support growth, despite challenges for the North Sea industry.”
Output of the dominant service sector gained 0.5 percent, according to the ONS. Nonetheless, it was slower than the prior quarter’s 0.9 percent growth. Meanwhile, construction and production declined 1.6 percent and 0.1 percent, respectively.
A strengthening pound means manufacturers are fighting a loss of competitiveness in the euro area, threatening to knock British exports performance, Cridland said.
Further, political uncertainty may be affecting businesses’ capital spending plans, he said, citing the recent decline in investment intentions in the industry lobby’s surveys.
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