David Prosser: The UK economy and a tale of two companies

Outlook Yesterday's extremely disappointing GDP data – and there really is no other way to characterise it – was accompanied by a slew of results from large companies that did not all conform with the rubric of a country showing no growth.

Still, the updates of two companies in particular speak to the increasingly agonising dilemma facing those in charge of economic policy at both the Treasury and the Bank of England.

At BP, first-quarter profits came in at £3.3bn, just 2 per cent less than in the same period of last year, despite the company producing 11 per cent less oil after selling assets to meet the costs of the Deepwater Horizon accident, and making further provisions against that disaster.

At Associated British Foods' Primark retail business, meanwhile, managers were painting a bullish picture of the outlook for the months ahead, but warning that the company would have to put up with deteriorating margins in order to realise this vision.

BP's numbers, of course, are all about the oil price. Primark, meanwhile, is set to be one of the beneficiaries in an economy in which consumer spending is muted and focused at the value end of the high street. But only if it absorbs those surging commodity prices.

What does the Bank do in the face of the competition between the moribund consumer sector and continuing inflation? And can the Treasury continue with its focus on austerity?

We will see in the months ahead. But yesterday's GDP figures almost certainly rule out an interest rate rise next month. And they heap the pressure back on the Chancellor to scale back the ambition of his cuts.