Good afternoon. So it turns out that growth in the first quarter was disappointing.
Hopes that the abrupt slowdown in the British economy in the first three months of the year was less pronounced than preliminary estimates suggested were dashed today after the Office for National Statistics left its initial estimate unchanged at 0.3 per cent.
Analysts had predicted an upward revision to 0.4 per cent because of more upbeat survey information, particularly from the dominant services sector, but services was revised lower by 0.1 percentage point in today’s estimate.
The biggest drag was trade, which knocked 0.9 percentage points off the quarterly GDP rate, due to high imports of oil, machinery and transport equipment. That was the biggest drag since the third quarter of 2013. Patrick Hosking, our Financial Editor, has the story here.
The pound fell a third of a cent to as low as $1.5332 after the data was published. For all the reaction, log on to the new-look Business Now live blog, which now pops out, making it easier to read.
In better news, particularly for SMEs, the latest figures from the Bank of England’s Funding for Lending Scheme (FLS) showed lending to small businesses increased by £635 million in the first quarter of this year.
The recent shift to concentrate on lending to businesses, instead of households, through the scheme appears to have worked as the first quarter increase reversed an £800 million drop in lending by FLS participants in the previous quarter.
Most of the increase was from Lloyds Banking Group, where lending under the scheme rose by £409 million.
Sticking with lending (although this time to households). The number of mortgage approvals made to home buyers jumped to a 10-month high last month amid wider signs of "broad confidence" in the economy, according to the latest report from the British Bankers’ Association.
Some 42,116 mortgages for house purchase with a total value of £7 billion got the green light last month, marking the highest number seen since June 2014. There was also evidence that business lending may have reached a "turning point", the report said.
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Have a great day.
Rebecca Clancy
Breaking News Editor, Business
The Times
rebecca.clancy@thetimes.co.uk
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