UK GDP grew at a steady rate in the first quarter, a sign the economy remained resilient in the face of volatile energy prices and ongoing weakness in the neighbouring Eurozone.
The UK economy accelerated 0.6% in the first quarter, following a similar increase in the December to February period, the National Institute of Economic and Social Research (NIESR) reported today.
The NIESR estimate is higher than other forecasts, which say UK GDP growth slowed to around 0.4% in the first quarter. The pessimistic forecast stems from a sharp decline in North Sea oil production in February, as well as a weaker manufacturing sector.
The NIESR said weaker growth in industrial production and construction shaved approximately 0.15 percentage point off first quarter GDP growth.
However, other estimates are much more upbeat, citing a late-quarter improvement. According to global research firm Markit Group, the UK economy grew 0.7% in the first quarter.
“The UK economy moved up a gear in March, recording the strongest pace of growth since last August,” said Markit chief economist Chris Williamson in a press release dated April 7.
The last official figures released by the Office for National Statistics said UK GDP growth was higher than initially forecast in the fourth quarter. The economy accelerated 0.6% in the final three months of 2014, up from an initial estimate of 0.5%. On an annual basis, GDP growth was 3%, compared to a prior estimate of 2.7%.
The government of Prime Minister David Cameron will use the impressive growth figures to appeal to voters in the upcoming general election set for May 7. The UK economy made rapid progress in 2014, regaining its pre-recession peak. The labour market has been especially resilient, with employment currently sitting at a record high. According to Chancellor George Osborne, 73.3% of working age people are employed in Britain. The jobless total sits at 1.86 million, the lowest since mid-2008.
The UK economy is forecast to grow 2.7% this year, according to the International Monetary Fund. UK GDP is then expected to grow at a 2.4% pace in 2016. Global growth was revised down to 3.5 percent and 3.7 percent in 2015 and 2016, from 3.8 percent and 4 percent previously.