What does weak growth mean for UK?

Press Association
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Britain experienced a sharp slowdown at the start of the year as growth slipped to a worse-than-expected 0.3%, official figures showed today.

The pace of gross domestic product (GDP) growth in the first quarter was half the 0.6% rate seen in the final quarter of 2014, a pre-election setback for Coalition parties.

It was the weakest quarterly growth since the end of 2012. The data comes just nine days before the General Election as politicians vie to demonstrate their competence in running the economy.

Here, we take a look at what this means.

Does this mean the recovery is over?

No. Gross domestic product (GDP) grew by 0.6% at the end of 2014 and the economy's expansion continued for the first three months of this year, though at a slower pace.

What might have gone wrong?

The fall in oil prices has taken its toll on North Sea oil production as industrial output has struggled. Construction has shrunk and goods exports have fallen. Retail sales have also struggled while the dominant services sector had a poor January.

Will things get worse or better?

A number of economists expect the pace of GDP growth to pick up again later this year as low inflation feeds through to higher consumer spending. But there are also warnings about the effect of any prolonged uncertainty following the election.

What will the figures mean for the election?

Politicians from all sides will likely seize on them, with the Coalition parties put on the back foot by signs that the recovery is weakening. But the Tories claim a Labour win would spell economic chaos.

Will a slowdown have any effect on interest rates?

Weaker growth is likely to cement expectations that rates, which have been on hold for six years at 0.5%, will not rise until next year for fear that a hike could choke off the recovery.

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