The Bank of England was once again proven wrong as the UK economy outperformed the Bank’s forecast for the first three months of the year.
Quarterly real gross domestic product (GDP) grew 0.1% from January and March, according to the Office for National Statistics.
This was in line with consensus expectations among economists for growth of 0.1% but exceeded the Bank of England forecast of 0% in the first quarter.
But on a monthly basis, GDP in March fell by 0.3%. This is a much larger drop than the consensus forecast for 0pc growth.
The quarterly growth rate was predetermined in January, when GDP grew by 0.5%. In February, growth was flat.
March data points to the impact of successive strikes in the public sector.
Darren Morgan, ONS’ director of economic statistics, said: “Throughout the quarter overall, growth was driven by IT and construction, which was partially offset by declines in health, education and behaviour. public administration, with these sectors affected by the strikes.”
Without the impact of the strikes, quarterly GDP growth for the first three months of the year would have been 0.2%, the Bank said on Thursday.
Construction output rose 0.7% in the first three months of the year, the sixth consecutive quarter of positive growth.
January-March growth was driven by repair and maintenance activity, which increased 4.9%.
It comes after the Bank of England improved the UK economy’s growth outlook to a record on Thursday by raising interest rates to their highest levels since 2008.
The rate-setting Monetary Policy Committee forecasts that the economy will be 2.25% bigger in three years’ time than it predicted in February – the biggest growth in its history.
The bank predicted an expansion of 0.2% in the first and second quarters just six months after predicting that the economy would not grow at all in 2023.
It also revised up its full-year forecast for 2023 to 0.25%, compared with a forecast for a 0.3% decline in February.
Data shows growth in the first quarter of 2023 comes after the UK economy narrowly avoided a recession by the end of 2022.
The economy was flat for the last three months of last year, having shrunk 0.3% in the July-September period.
