Growth rises with biggest production push since 80s

Media playback is unsupported on your device                  Media captionHammond Economy is robust

Media playback is unsupported on your device Media captionHammond Economy is robust

The UK economy grew by 1.8% compared with the same quarter in the previous year (Figure 1), its fastest rate since Quarter 3 (July to Sept) 2017.

This was boosted by a 2.2 per cent rise in manufacturing, the industry's highest output since the third quarter of 1988.

The ONS added that United Kingdom manufacturing jumped 2.2 percent in the first quarter with recent surveys showing Brexit-facing companies building inventories, said to include key vehicle parts and medicines. Output expanded by a hefty 2.2% during the quarter, a sign that both British and European businesses were doing what they could to prepare for the possibility that Britain might crash out of the EU without a deal leading to new future trading relations.

Pharmaceuticals in particular showed high activity, growing 9.4 per cent. The ONS said the boost was largely down to stockpiling as businesses continued to keep a firm eye on Brexit developments ahead of the original deadline of 29 March.

The rate at which inventories increased was the highest for any G7 country.

The deceleration echoes the trend noted by the Markit UK Services Purchasing Manager's Index (PMI) for March, when companies opted to delay spending due to the uncertainty over Brexit.

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"Consumers may therefore be cautious about making major purchases and the recent strong retail sales growth might falter".

Meanwhile, the UK's imports also increased in the first quarter, slashing some percentage points off the GDP in terms of foreign trade, but also translating into positive growth in the context of consumer demand.

Construction output increased by 1 per cent, driven by a 2.9 per cent rise in fix and GDPmaintenance work. The construction sector was another area of the economy to provide a boost in the first two months of the year and a negative contribution in March.

But the ONS warned that the figures could be revised, with some external evidence suggesting confidence remained weak during the period.

Private consumption, government consumption and gross capital formation also contributed positively, while net trade subtracted from GDP growth in the first quarter.

However, Friday's ONS data unexpectedly showed a return to growth for business investment in the first three months of the year, after contracting for every quarter of 2018.

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