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By Les Commons, Laurie Laird and Shaily Mittal
LONDON (MNI) - GDP growth accelerated to an as-expected 0.5% in the
first quarter, a 1.8% annual gain, lifted by unique factors linked to
the original March 29 Brexit date.
The following are the key points from UK GDP data published Friday by
the Office for National Statistics.
- Manufacturing activity surged by 2.2%, adding 0.22 percentage
points to total GDP growth, the biggest positive contribution since Q3
1999. ONS officials noted widespread accleration of deliveries for both
domestic and export orders.
- Government spending jumped by 1.4% in Q1, the biggest increase
since Q1 2012, adding 0.25 percentage points to growth. A spokesperson
would not be drawn on whether the leap was related to Brexit
preparations, noting only that the additional expenditure was spread
across government departments.
- The trade deficit ballooned to Stg18.337 billion in Q1, from
Stg9.438 billion in Q4, subtracting a record 2.16 percentage points
from total GDP growth.
- Business investment rose by 0.5%, breaking a four-quarter run of
declines, the longest since the financial crisis. The spending was
concentrated on information technology and plant and equipment. Again,
officials refused to be drawn on a link to Brexit.
- Household spending accelerated to 0.7% from 0.3% in the fourth
quarter, adding 0.42 percentage points to GDP. ONS officials were unable
to provide a breakdown of spending.
- Service sector growth slowed to 0.3% in Q1, with financial
services continuing to dampen the sector, retreating by 0.4%, after a
0.1% decline in the month of March. Financial services have not expanded
for 15 straight months, the longest stretch of decline since records
began in 1997.
- The quarter ended on a weak note, suggesting a strong role for
Brexit-related activity in the early months of 2019. GDP retreated by
0.1% in March, with a 0.9% m/m increase in manufaturing providing the
only real bright spot in the economy.