GDP growth remains steady at 0.5% in Q1
The National Institute of Economic and Social Research estimates that GDP output grew by 0.5% in the first three months of 2017.
"Consumption is expected to moderate further this year as increasing inflation erodes households’ purchasing power."
This follows growth of 0.5% in the three months ending in February 2017, down slightly from the initial forecast of 0.6% and the 0.8% growth seen in January.
NIESR’s latest quarterly forecast projected GDP growth of 1.7% per annum in 2017 and 1.9% in 2018.
James Warren, Research Fellow at NIESR, said: “We estimate growth slowed slightly in the first quarter of 2017 to 0.5%. A key component of this moderation has been relatively weak retail sales in the first two months of this year. Consumption is expected to moderate further this year as increasing inflation erodes households’ purchasing power. We expect the Bank of England to look through this temporary shock to inflation and for monetary policy to remain accommodative.”
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