Commenting on today’s GDP data, Ms Lee Hopley, Chief Economist at EEF, the manufacturers’ organisation, said:
“While the downward revision may have been unexpected, the reasons behind the weakness surely aren’t. Sluggish household spending growth, a consequence of the squeeze on real incomes starting to kick in, and some pull back on export growth after an impressive end to last year.
“We expect the consumer weakness to persist as wage growth falls further behind rising prices, but there should be some turnaround on the trade front, driven by a brighter outlook in the rest of the world. For those on the hunt for some good news in the data it was to be found in the investment numbers. Business investment picked up at the start of this year and some big revisions to investment at the end of last year mean the investment picture isn’t as dire as first thought. Still, we’ll need to see this rebound continue and strengthen if for longer-term productivity prospects to improve.”