- U.K. Economy Expands At Slower Pace in Q1
U.K. economy grew at a slower pace in the first quarter of 2018 as the impact of snow on retail sales and construction weighed on growth.
The economy expanded at 0.1 percent rate, down from 0.4 percent recorded in the final quarter of 2017 and 0.3 percent predicted by economists, the Office for National Statistics reported on Friday.
Year-on-year, the economy grew at 1.2 percent, the lowest rate in five years.
In the same quarter, the services sector slowed to 0.3 percent, while construction declined by 3.3 percent with industrial output expanding by 0.7 percent and manufacturing sector climbing just 0.2 percent.
With the economy growing at a slower pace, experts believe the Bank of England will refrain from raising interest rates in May due to weak economic fundamentals. Also, the political uncertainty surrounding Brexit decision is expected to further affect economic outlook in the second quarter. Hence, the reason the central bank might leave rates unchanged next month.
The pound declined by more than 1 percent against the U.S. dollar to 1.3758 as projected during the week, therefore, a sustained break of 1.3737 should further pressure the pound towards 1.3540 support level as shown below.