IT geeks scupper hopes for UK growth

In a blow to the Chancellor, April’s initial estimate was left unchanged after growth services was cut from 0.5 per cent to 0.4 per cent

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The Independent Online

Growth in the UK's dominant service sector faltered in the first quarter, dashing hopes the economy’s weak showing in the first three months of the year would be revised up.

Economists were hoping a weak 0.3 per cent expansion would be upgraded to 0.4 per cent.

But, in a blow to the Chancellor, George Osborne, April’s initial estimate was left unchanged after growth services, accounting for more than three quarters of GDP, was cut from 0.5 per cent to 0.4 per cent.

The main culprit was computer programming and consulting industries, where output shrank 3.8 per cent in March.

Business investment rose at its strongest pace since April-June last year, although trade was a drag on growth, the latest estimates showed. ING Bank’s James Knightley said: “Overall, the headline GDP figure is a disappointing outcome, but we suspect that the real story on UK activity is stronger given evidence from business surveys, employment numbers and confidence indicators.”

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