# data[].attributes.body
Economic Issue: Fall in GDP growth in the first quarter of 2018 larger than expected.
Economists predicted the GDP growth of the first quarter of 2018 to be 0.2% lower than the last quarter of 2017's GDP growth  of 0.4% but instead the GDP growth decreased by 0.6% to -0.2%. This could have been due to the 1.6% drop in construction output, which was partially caused due to the collapse of Carillion. Carillion was 1 of the UK's biggest construction companies, that used to employ 43,000 people globally and 20,000 in Britain.

# data[].attributes.attachment_link.readable_text
Economic growth in the UK is expected to have fallen by half in the opening months of the year, one of Britain's leading forecasting bodies has said, amid renewed concerns for the health of the economy.

The National Institute for Economic and Social Research (NIESR) said growth was set to fall to 0.2% in the first quarter of 2018 from 0.4% in the final three months of last year, when the economy enjoyed a mini-recovery despite an overall slowdown in 2017 triggered by the Brexit vote.

Amit Kara, head of UK macroeconomic forecasting at the thinktank, said the main reason for the weakness was severe weather in March, dubbed the "beast from the east" in the media, which was likely to have disrupted activity in all major sectors of the economy.

uk economic growth

The estimate, which comes ahead of official figures from the Office for National Statistics later this month, followed news that Britain's factories recorded a surprise fall in production in February, in the first drop in activity in the sector for almost a year.

Confirming fears of a slowdown in the UK economy so far this year, figures from the ONS showed manufacturing output declined by 0.2% in February, falling well behind economists' expectations for growth of 0.2%.

There was also a sharp drop in construction output, suggesting continued pain for the industry amid the fallout from the collapse of Carillion. Monthly output unexpectedly fell by 1.6% in February, as builders were hit by the snow at the end of the month.

Factories producing machinery such as turbines, pumps, compressors and agricultural toolsrecorded the sharpest falls in February, the worst month for the manufacturing sector since March last year.

Ruth Gregory, UK economist at the consultancy Capital Economics, said: "Manufacturing growth appears to have come off the boil."

However, the ONS said there was no evidence that heavy snowfall in February had a negative impact on output, which will likely stoke fears for the health of Britain's factories - which have generally performed better than much of the economy in the last year.

Overall industrial production, which includes mining, quarrying and energy, rose by 0.1% compared with the previous month. Energy supply provided the biggest contribution, rising by 3.7%, helped by the cold weather.

The figures provide a snapshot of the economy just before there was further snowfall in early March, meaning there could be worse news to come from manufacturers.

There had been signs of the weakness for the economy earlier this year from company surveys, which showed falling activity compared with the final months of 2017.

However, there was better news for Britain's trade deficit - the difference between imports and exports - which shrank more than expected to £10.2bn in February from £12.2bn in January.

Ian Stewart, chief economist at Deloitte, said there were still positive signs for the British manufacturing sector, with demand for goods helped by the strength of the world economy and a weak pound. "If we can't do well in terms of manufacturing output in conditions like that then we've got problems," he said.

NIESR said lacklustre initial readings for the economy can often be revised higher by the ONS, as officials continue to receive fresh data after they pronouncing their first assessment for growth. When extreme cold weather led to GDP falling by 0.5% in the final quarter of 2010, the figures were later revised to show growth of 0.1%.

Economists said the Bank of England was likely to press ahead with raising interest rates from as early as next month, despite the apparent weakness for the economy in the first quarter.

Lee Hopley, chief economist at EEF, a manufacturing lobby group, said: "The data looks more like a temporary wobble than a turn for the worse. While other indicators may have softened since the start of the year, ongoing growth in the global economy should continue to spur growth across manufacturing in the coming quarters."
Topics

# data[].attributes.attachment_link.title
UK economic growth has fallen by half, forecasters say

# data[].attributes.attachment_link.description
Economic growth in the UK is expected to have fallen by half in the opening months of the year, one of Britain's leading forecasting bodies has said, amid renewed concerns for the health of the economy.

# data[].attributes.body
Economic Issue: Inflation following the Brexit.
Inflation jumped in April 2017 due to the plunge in value of the pound following the Brexit vote.
At this point, real wages turned negative as it grew at a slower rate than inflation.
However, in February 2018, wage growth finally grew to 2.8 per cent, higher than the 2.7 per cent rate of consumer price inflation in that month.
This was a type of cost-push inflation which was a result of the 15% depreciation of the British pound following the Brexit.
Another cause was the 20% increase in oil prices in late 2016, which was a result of oil producing countries agreeing to curb production.
Overall, this caused the cost of living in Britain to increase, due to the increase in price of imports and other resources in Britain

# data[].attributes.attachment_link.readable_text
Wages grew faster than inflation for the first time in almost a year in February and the jobless rate fell to just 4.2 per cent according to the latest official data.

The Office for National Statistics reported that weekly average earnings were up 2.8 per cent in the three months to February on a year earlier, higher than the 2.7 per cent rate of consumer price inflation in that month.

Real wages turned negative in April 2017 as inflation jumped due to the plunge in the pound in the wake of the Brexit vote.

"Wage growth has been the missing piece of the puzzle in Britain's long, slow recovery from the financial crisis," said Tom Stevenson of Fidelity International.

"With the final piece now in place the Bank of England now has the catalyst to be able to follow through on its plans to raise interest rates at the next MPC meeting in May and start the move back towards monetary normality."

Others said the optimism about pay ought to be guarded.

"It's good to see pay finally back in positive territory, but Britain has a lot of ground to make up after an awful decade of pay squeezes, stagnation and all too fleeting recoveries. On average, people are still taking home less than they did before the crisis," said Stephen Clarke of the Resolution Foundation think tank.

Real wages rising again

Meanwhile, the unemployment rate for the three months to February ticked down to 4.2 per cent, from 4.3 per cent previously. City analysts had expected it to be unchanged.

The employment rate rose to a new record high of 75.4 per cent.

According to the ONS the number of people in jobs rose by 55,000 over the period, while the numbers out of work fell by 16,000.

The work and pensions secretary Esther McVey heralded the figures as evidence of the continuing strength of the UK jobs market.

"Day by day we are helping people turn their lives around by getting them into employment. Jobs are key to transforming lives and work is the best route out of poverty," she said.

Reuse content

# data[].attributes.attachment_link.title
UK wages rise faster than inflation for first time in a year

# data[].attributes.attachment_link.description
Wages grew faster than inflation for the first time in almost a year in February and the jobless rate fell to just 4.2 per cent according to the latest official data.

# data[].attributes.body
Economic Issue: Unemployment in UK rises
• The unemployment rate in UK rose at the fastest rate in five years
• In October to December 2017, the number of unemployed is standing at 1.47 million after increasing by 46,000
• A main factor in this issue is the increase in (cyclical) unemployment among young people under the age of 24. (Newly graduates are unable to find jobs as there are not enough jobs in UK)
• Fewer jobs are created, lesser people are employed, number of hours worked fall and productivity drops

# data[].attributes.attachment_link.readable_text
The prospect of an interest rate rise before the summer has receded after the number of people out of work in Britain rose at the fastest rate in almost five years.

Fuelled by an increase in unemployment among young people under the age of 24, the number of jobless rose by 46,000 to stand at 1.47 million in the three months to December, according to the Office for National Statistics.

The rise in unemployment, which comes after it fell to levels not seen since the mid-1970s, pushed the jobless rate to 4.4% against City forecasts for the level to remain unchanged at 4.3%.

The worsening picture was emphasised by figures showing a slowdown in the creation of jobs, a fall in the number of hours worked and a dip in productivity growth.

The Bank of England said this month that the UK economy was beginning to overheat after a sharp rise in inflation and a tightening labour market. In its quarterly inflation report it said an interest rise was only months away if the rising demand for workers, which is reflected in the huge growth in vacancies, continued to force up pay growth.

Wednesday's ONS data showed that average weekly earnings excluding bonuses increased by 2.5%, beating City forecasts for the rate of pay growth to stay unchanged at 2.4%. However, this remains below the rate of inflation, meaning workers are yet to see real wage growth.

Maike Currie, an investment director at fund manager Fidelity International, said:"With the Bank of England increasingly pinning the chances of further interest rate hikes on accelerating pay growth, the prospect of an early rate rise seems unlikely."

Compared with inflation, take-home wages were worth 0.3% less in December than the year before.

The TUC general secretary, Frances O'Grady, said: "The great pay squeeze continues. This is the 10th month in a row that real wages have fallen." Most of the increase in wages over the last year has gone to managerial and professional workers while those on lower incomes have relied on increases in the "national living wage" to boost their living standards.

On a more upbeat note, the ONS said there was an increase in the number of full-time employees and a decrease in part-time and self-employed work.

John Hawksworth, the chief economist of accountancy group PwC, said it was encouraging that previously inactive people were seeking work in greater numbers, some of them finding jobs and others still searching and so being classified as unemployed. He said this showed that the rise in unemployment was a spin-off from people entering the jobs market.

Some analysts said the contradictory signals from the employment figures made it more difficult to predict whether the Bank's interest rate setting committee would increase rates by 0.25% to 0.75% at its meeting in May.

John Philpott, the director of the Jobs Economist consultancy, said the economic picture was perplexing because pay had increased at a time when unemployment rose, which is unusual because pay rises tend to come when there are fewer people out of work.

"It clearly adds to the conundrums facing economists, not least those at the Bank of England when they next consider if and when to raise interest rates," he said.

The total number of hours worked fell by 0.3%, while growth in output per hour worked, which is a measure of labour productivity, dipped from 0.9% to 0.8%.

"In other words, a labour market that struggled to boost pay when getting tighter, just saw pay strengthen when conditions got a bit weaker," said Philpott. "This pattern is difficult to explain, though may become clearer as more data become available. However, it clearly adds to the conundrums facing economists, not least those at the Bank of England when they next consider if and when to raise interest rates."
Topics

# data[].attributes.attachment_link.title
UK unemployment rises at fastest rate in almost five years

# data[].attributes.attachment_link.description
The prospect of an interest rate rise before the summer has receded after the number of people out of work in Britain rose at the fastest rate in almost five years.