UK DATA: Q1 Preliminary GDP up to +0.5% q/q; +1.8% y/y
–Q1 GDP in line with median forecast of +0.5% q/q
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GDP rose 0.5% q/q in Q1 and by 1.8% y/y, in line with the median
forecast. While services growth rose a healthy 0.9% q/q and
manufacturing was up 1.1%, overall growth was held back by a 4.7%
decline in construction and also some drag from output of the utlities
industries. Agricultural output was up 0.6% q/q. Overall GDP growth in
level terms is the same as in 2010 Q3 meaning no growth since that
point. With growth below the 0.8% implied forecast from the BOE in Feb,
it would appear that all bets are now off for an early May rate hike
with most economists now looking at Aug. Still, core elements of GDP
such as services and manufacturing were motoring away in Q1 and the
there are doubts over the accuracy of the rather erratic construction
data. Ex-construction and utilities GDP was up a healthy 0.9% q/q.