UK economy grows 0.5% in first quarter
The UK economy grew 0.5% in the first quarter, according to preliminary figures released by the Office for National Statistics on Friday.
This was in line with expectations and an improvement on the 0.2% growth seen in the previous quarter.
On the first quarter of 2018, GDP was up 1.8% compared to 1.4% growth in the last three months of 2018, also in line with economists’ expectations.
The report revealed that consumer spending rose 0.7% in the first quarter, possibly due to stockpiling ahead of Brexit. Meanwhile, manufacturing was up 2.2% and services increased 0.3%.
Tej Parikh, senior economist at the Institute of Directors, said: "The relatively strong growth figures for Q1 may just be a flash in the pan.
"Some businesses brought activity forward early this year in preparation for leaving the EU, so higher stocks and earlier orders have artificially bumped up the growth numbers. In Q2 many firms will be keen to run down their Brexit caches, which will drag on economic growth. Keen consumers also played a key role in lifting sales in the first quarter, but barring temporary boosts due to weather, households will overall remain cautious in the months ahead.
"While the Brexit extension avoided the immediate risk of ‘no deal’, the economy will remain in a state of limbo until there is a clear path out of this situation. Households are still being put off from making big purchases and business leaders are shelving major projects. The economy has undoubtedly displayed some resilience, but if the uncertainty abated we could be building upon this solid base."
Sterling showed no reaction to the data, remaining flat against the US dollar at 1.3010.
David Cheetham, chief market analyst at XTB, said: "The improvement in growth was widely expected and it’s not been the best week for sterling with the currency drifting lower after an attempt to push higher last Friday."