Commenting on today’s UK GDP data, Michael Baxter, Economics Commentator at The Share Centre said:
“The ONS has revised its estimate of growth in UK GDP downwards from its previous estimate of 0.3% to 0.2%
“It seems that the UK economy has been hit by the rising cost of living, largely caused by Brexit-related falls in sterling, and rising input prices worldwide. Retail and accommodation took a particularly large knock, but it was a bad quarter for manufacturing and construction too. This was in marked contrast with the final quarter of last year, which saw 0.7% growth.
“It has been a different story in the euro area, which expanded by 0.5% in the first quarter of 2017. As Mark Twain might have said if he were alive today, ‘reports of the death of the euro economy have been greatly exaggerated.’
“However the UK can find some reason for optimism. The latest purchasing managers indexes (PMIs) pointed to a robust pick-up in April, with the PMI tracking UK manufacturing rising to a three year high and the PMIs collectively consistent with growth of 0.6% in the third quarter.
“The retail sector has seen some improvement too, but it remains to be seen how much of this was related to the unseasonably good weather in April and the timing of Easter.
“Investors, however, need not worry too much about the poor performance in Q1 as to a large extent this is already reflected in share prices. Of more relevance is whether the apparent improvement in April continues. We will know more next week with the latest PMIs, this time covering May.”