Pound falls on weak UK GDP data

Britain’s economic recovery stumbled on Tuesday, after disappointing GDP data was released. Sterling suffered on the news, falling sharply from near two-month highs.

The UK’s leading share index, the FTSE 100, also declined and was around 0.8 per cent lower in Tuesday morning's trading session.

The report showed the UK’s economy grew only 0.3 per cent in the first quarter of 2015; the slowest rate of quarterly growth in two years. Analysts had been expecting stronger growth of 0.5 per cent.

ONS chief economist Joe Grice cited lower growth in the services sector as the main contributor, where growth has eased to 0.5 per cent.

It will throw a spanner in the works ahead of the imminent General Election on May 7th, particularly as it highlights how unbalanced the UK economy is. The report illustrated that the economy remains heavily reliant on consumer spending and the services sector for growth.

The uncertainty surrounding the outcome of the UK’s election weighs upon markets, sending European bourses lower.