UK economy grows just 0.5% in first quarter

| April 27, 2011
UK economy grows just 0.5% in first quarter

The Office for National Statistics (ONS) has today revealed the UK economy grew by just 0.5% in the January to March period.

However, the figure was in line with expectations and follows the shock contraction of 0.5% in the final three months of 2010 a�� which was attributed to bad weather.

The poor first quarter growth was the result of a 4.7% fall in construction in the three-month period a�� the biggest drop since the first quarter of 2009 when Britain was in the midst of recession.

Despite the poor performance, the economy has avoided a double-dip recession, although todaya��s estimate of GDP is the first of three and the figures could be revised up or down in the coming months. At this stage, only 40% of the data is available.

Meanwhile, todaya��s figures are likely to result in Bank of Englanda��s Monetary Policy Committee (MPC) maintaining interest rates at the historic low of 0.5% – where they have been for two years.

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