Propel Morning Briefing

Hotels and restaurants see fall in trade as UK economic growth slows to 0.3%

Hotels and restaurants saw a fall in trade as UK economic growth slowed to 0.3% in the first quarter of 2017. The Office for National Statistics (ONS) said the services sector, which accounts for more than 80% of UK economic output, grew by 0.3% in the first quarter of 2017, compared with growth of 0.8% in the fourth quarter of 2016.

The ONS reported the main contributor to the slowdown in services was the distribution, hotels and restaurants sector, which decreased by 0.5%, contributing negative 0.07 percentage points to quarter-on-quarter GDP growth.

Economists had forecast growth to come in at 0.4% on a quarterly basis and 2.2% on an annualised basis. The annualised figure now stands at 2.1%. The economic slowdown follows 0.7% growth in the final quarter of 2016.

The most recent data confirmed a trend of slowing economic growth amid tighter conditions for UK consumers, who are traditionally seen as the engine of the UK economy. Inflation has been rising since June 2016 following the pound’s fall on the result of the EU referendum. This has, in turn, pushed up the cost of imports and therefore prices.

 

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