UK Growth Up Modestly in Q1
|in:Economy in Brief
The UK economy grew by 0.1% in the three months to March 2023, matching market expectations. On a monthly basis, GDP fell by 0.3%, after showing no growth in February. The contraction in output in March was mainly driven by a weaker services sector, the output of which declined by 0.5% after a fall of 0.1% in February. In particular, output in the wholesale trade and retail sector fell by 1.4% thanks to much weaker household spending in response to rising inflation. Output in consumer-facing services fell by 0.8% in March 2023 after a rise of 0.4% in February.
In contrast, growth trends in other key component sectors such as production and construction were more upbeat. Specifically, industrial production grew by 0.7% in March which was the strongest pace of growth since May 2021. Construction sector output also grew by 0.2% in March following growth of 2.6% in February.
Despite the increase in output in Q1, GDP is still some 0.5% below its pre-pandemic level. Still, the economy has now eked out two consecutive quarters of growth, which chimes with the Bank of England’s revised view that the UK may now avoid a recession in 2023.
Andrew CatesAuthorMore in Author Profile »
Andy Cates joined Haver Analytics as a Senior Economist in 2020. Andy has more than 25 years of experience forecasting the global economic outlook and in assessing the implications for policy settings and financial markets. He has held various senior positions in London in a number of Investment Banks including as Head of Developed Markets Economics at Nomura and as Chief Eurozone Economist at RBS. These followed a spell of 21 years as Senior International Economist at UBS, 5 of which were spent in Singapore. Prior to his time in financial services Andy was a UK economist at HM Treasury in London holding positions in the domestic forecasting and macroeconomic modelling units. He has a BA in Economics from the University of York and an MSc in Economics and Econometrics from the University of Southampton.