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Weak retail sales held back UK growth in Q1 2017, says think tank

by: Paloma Kubiak
  • 07/04/2017
  • 0
The UK economy slowed slightly in the first quarter of 2017, according to the National Institute of Economic and Social Research (NIESR).

Estimates from the think tank suggest GDP output grew by 0.5% in the three months ending in March 2017, after growth of 0.5% in the three months ending February 2017.

NIESR said the slowing growth was due to weak retail sales.

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.”

In NIESR’s latest quarterly forecast published in February, it projected GDP growth of 1.7% in 2017 and 1.9% in 2018.

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