UK Construction Stumble to Slow Down Economy

Britain’s economy will grow at a slower pace this year and faces serious risks from weak productivity and a troubled eurozone, a leading thinktank has warned.

The National Institute of Economic and Social Research (NIESR) has cut its forecast for growth this year to 2.5%, down from 2.9% pencilled in three months ago and below the 2.8% rate last year. The move follows much weaker than expected official GDP figures for the first quarter, which saw Britain’s growth rate halve to 0.3%.

Those figures and the downgrade from NIESR come as a blow to the Conservatives before the election. But the thinktank said the rocky start to 2015 appeared to be a blip and the overall picture was of a “reasonably stable” recovery.

“There are undoubtedly concerns that this quarter is the harbinger of a pervasive slowdown. However, this is probably just a temporary deceleration, partly related to a fall in construction output, a sector that is particularly volatile,” said NIESR’s principal research fellow Simon Kirby.

“We expect economic growth, consistent with a modest recovery, to resume from the second quarter.”

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza