While it was good that the U.K. economy keeps growing, the recovery should not be taken for granted, the Chancellor of the Exchequer George Osborne said on Tuesday after official data revealed that the pace of growth halved in the first quarter of the year.
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.
“Good news economy continues to grow but this is a critical moment & reminder you can’t take recovery for granted,” Osborne said on Twitter.
“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.”
The country goes to polls on May 7 and the news of the growth slowdown came as a blow to the Conservative and Liberal Democrat coalition.
Year-on-year, GDP advanced 2.4 percent in the first quarter, slower than the expected increase of 2.6 percent.
“Potential political uncertainty poses a significant downside risk to growth in 2015, and also 2016,” IHS Global Insight economist Howard Archer said.
“If there is sustained political uncertainty after the imminent general election, then the UK could well suffer at least a temporary loss of economic traction.”
That said, the economist said he was upbeat about growth prospects for this year and that fundamentals are particularly promising for consumer spending.
The material has been provided by InstaForex Company – www.instaforex.com