Britain’s economy slowed more than expected in the opening months of this year, with GDP growth slipping to 0.3% from 0.7% the previous quarter as the post-referendum rise in living costs took its toll on British households.
The news adds to signs that the resilience seen for the UK economy in the wake of the Brexit vote is now waning and will come as a blow to Theresa May’s government as it banks on a solid victory in the snap election on 8 June.
Economists had expected growth to slow more modestly to 0.4% in the first quarter, according to a poll by Reuters. The 0.3% growth rate was the slowest for a year. Statisticians said the biggest drag was the retail sector, echoing other signs shoppers are cutting back.
The slowdown follows a pick-up in inflation to its highest level in three years on the back of higher oil prices and the pound’s sharp fall since the referendum. The rise in living costs has eaten into household budgets and knocked consumer spending, a key driver of growth in the UK.
More detail to follow …