The first quarter economic growth of United Kingdom slowed down significantly and economists are now putting up questions whether this is the start of Brexit stagnation.
The British GDP from January to March was recorded at 0.3 percent and the figure is less than half of the 0.7 percent growth measured in the last quarter of 2016.
The measured figure is also half of the forecast of Bank of England.
This is like hitting traffic and slowing down to 30mph, said head of European fixed income strategy at Scotiabank, Alan Clarke.
BoE governor Mark Carney said last year in November the tension between strength of consumers and pessimistic expectations of the market will be resolved.
Carney had also forecast then the consumer spending would slow down due to rise in inflation that would weigh on people’s incomes.
Six months after his prediction the market is hitting the households as inflation has increased the prices of commodities and pound has devalued. This has resulted with curb in consumer spending.
The figures have been measured by the European Commission’s economic sentiment indicator.
However, the big question still remains whether households will further cut back as prices will remain to grow.
Apart from all these, It is learned the pubs and restaurants enjoyed the growth of 2.7 percent in the first quarter. The segment saw a growth rate of 2.7 percent in the first quarter of 2017 and in March the sales had hit record levels.
Anderw Wishart of Capital Economics said consumers are squeezing on their spending power during higher inflation.