This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2015/may/28/services-output-revised-down-as-uk-economic-growth-unchanged

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Services output revised down as UK economic growth unchanged at 0.3% Services output revised down as UK economic growth unchanged at 0.3%
(35 minutes later)
Official figures have confirmed that Britain’s growth rate slowed to 0.3% in the first three months of the year after an improvement in construction output was offset by a slowdown in the services sector.Official figures have confirmed that Britain’s growth rate slowed to 0.3% in the first three months of the year after an improvement in construction output was offset by a slowdown in the services sector.
The second estimate of GDP by the Office for National Statistics was expected to show that the halving of the UK’s growth rate from last year had been exaggerated and would be revised upwards. The second estimate of GDP by the Office for National Statistics was expected to show that the halving of the UK’s quarterly growth rate had been exaggerated and would be revised upwards.
But a mild bounceback in energy production and construction during the latter part of the quarter was wiped out by a 0.1 percentage point cut in services output from the previous estimate, pushing the largest sector’s growth rate down to the lowest since 2012. But a mild rebound in energy production and construction during the latter part of the quarter was wiped out by a 0.1 percentage point cut in services output from the previous estimate, pushing the largest sector’s growth rate down to its lowest since 2012.
The services sector dropped to 0.4% from 0.5% growth, well down on its 1% a quarter rate of expansion at the beginning of last year. The services sector growth dropped from 0.5% to 0.4%, well down on its 1% rate of expansion in the first quarter of last year.
Most economists expect the economy to pick up during the rest of this year now the election is out of the way, inflation and interest rates remain at historic lows and the jobs market remains buoyant. Most economists expect the economy to pick up during the rest of this year now the election is out of the way. Inflation and interest rates remain at historical lows and the jobs market remains buoyant.
Yet the slowing rate of services growth will worry the Treasury, which has come to rely on high street spending and a return to health in the City to mask a flatlining of output in manufacturing.Yet the slowing rate of services growth will worry the Treasury, which has come to rely on high street spending and a return to health in the City to mask a flatlining of output in manufacturing.
Unease among exporters over the prospects for a vote to leave the EU could also hinder business investment, which rose 1.5% over the quarter. Strikingly, net trade was one of the biggest drags on growth after a 0.9 percentage points dive. Unease among exporters about the outcome of a referendum to leave the EU could also hinder business investment, which rose 1.5% over the first quarter. Strikingly, net trade was one of the biggest drags on growth after a 0.9 percentage points dive.
Vicky Redwood, chief UK economist at Capital Economics said the net trade figure was “hardly good news from a rebalancing point of view”. Vicky Redwood, the chief UK economist at Capital Economics, said the net trade figure was “hardly good news from a rebalancing point of view”.
She added: “And the biggest positive contribution came from stockbuilding - up 0.5 percentage points - which is not generally considered a very sustainable source of growth.” She added: “And the biggest positive contribution came from stockbuilding – up 0.5 percentage points – which is not generally considered a very sustainable source of growth.”
The ONS pointed out that neither construction nor manufacturing had rebounded from the financial crash to take output its previous peak.The ONS pointed out that neither construction nor manufacturing had rebounded from the financial crash to take output its previous peak.
“Although, there has been widespread growth across all major components of GDP since the start of 2013, the service industry remains the largest and steadiest contributor to overall economic growth, and is the only headline industry in which output has exceeded pre-downturn levels,” it said.“Although, there has been widespread growth across all major components of GDP since the start of 2013, the service industry remains the largest and steadiest contributor to overall economic growth, and is the only headline industry in which output has exceeded pre-downturn levels,” it said.
Redwood said the rise in investment was “good news” and “looking ahead, we remain optimistic that Q1’s slowdown was just temporary and that the recovery is probably already back on track again”. Redwood said the rise in investment was good news and that “looking ahead, we remain optimistic that Q1’s slowdown was just temporary and that the recovery is probably already back on track again”.
ONS chief economist Joe Grice said: “Today’s unchanged figure of 0.3% growth in GDP in the first quarter of 2015 reflects small upwards revisions to production and construction, offset by a downward revision to services.ONS chief economist Joe Grice said: “Today’s unchanged figure of 0.3% growth in GDP in the first quarter of 2015 reflects small upwards revisions to production and construction, offset by a downward revision to services.
“It confirms the picture of somewhat weaker growth in the first quarter than in recent ones. But no single quarter’s figures should be given undue weight.”“It confirms the picture of somewhat weaker growth in the first quarter than in recent ones. But no single quarter’s figures should be given undue weight.”