UK economic growth slows to 0.3%

The rate of economic growth halved in the three months to the end of March, official figures show, marking the slowest quarterly growth for two years.

The economy grew by 0.3% in the first quarter the Office for National Statistics said.

That compares with 0.6% in the last three months of 2014 and 0.7% three months earlier.

Growth of 0.5% in the services industry was offset by a 1.6% fall in the pace of economic output in construction.

The UK services sector accounts for around three quarters of economic growth, with construction, manufacturing and production accounting for the remaining quarter.

The ONS said the economy was 2.4% larger than the same period a year earlier, meaning it remains the fastest growing economy in the G7.

The Chancellor, George Osborne, said: "It's good news that the economy has continued to grow, but we have reached a critical moment. Today is a reminder that you can't take the recovery for granted and the future of our economy is on the ballot paper at this election."

But Labour Shadow Chancellor, Ed Balls said: "While the Tories have spent months patting themselves on the back these figures show they have not fixed the economy for working families." 

'Temporary'

Vicky Redwood chief UK economist at Capital Economics said the figures clearly wouldn't help the coalition parties with just nine days to go until the general election.

But she added the slowdown in the economy "should just be temporary" and that quarterly economic growth should return to between 0.7% and 0.8% later in the year.

The figures represent a first estimate of economic growth and are based on less than half of the total required for the final output estimate. 

But the ONS said, while estimates are subject to revision as more data become available, the revisions are typically small between the preliminary and third estimates.

ONS chief economist Joe Grice said: "The economy expanded a little more slowly in the first quarter of 2015 than we've seen in the past two years and that's largely due to the services sector, where growth has eased to 0.5%. 

"In addition, there has been a further fall in construction output that itself takes around 0.1% off the GDP growth rate. But, as always, we warn against reading too much into one quarter's figures."