GDP growth plummets to 0.3% in Q1

Slower growth in Q1 was mainly due to services, which grew by 0.3% compared with growth of 0.8% in Q4 2016.

The ONS has also reported falls in several important consumer-focused industries, such as retail sales and accommodation, due in part to prices increasing more than spending.

Ben Brettell, Senior Economist at Hargreaves Lansdown, commented: "2017 looks set to be a year of slower growth, as higher inflation puts the squeeze on consumers’ real incomes ahead of June’s general election and the start of Brexit negotiations. The economy has surprised on the upside since last summer’s referendum, powered by a resilient consumer, but it looks like households are now starting to feel the pinch from the current bout of inflation.
 
"The GDP numbers follow March’s disappointing retail sales figures, which suffered their biggest quarterly drop since 2010. However, an industry survey this week gave cause for optimism, suggesting retailers had a good April and allaying economists’ fears of a consumer-led slowdown.
 
"It’s also worth noting that initial GDP estimates can usually be taken with a pinch of salt, as they are based on less than half of the data which will ultimately be available, and are therefore subject to revision in the coming months."