Business investment in Britain during the first quarter grew by 0.1 percent on the previous three months but the overall level of investment was revised down from earlier estimates, official statistics showed on Friday. The figures provide the latest evidence of an economy that appears to have lost considerable momentum in recent months and come as more analysts are forecasting a Bank of England interest rate cut, perhaps as soon as next week.
The small gain compared with a 0.1 percent quarterly decline published by the Office for National Statistics one month ago and a 0.4 percent decline in the fourth quarter of 2004 that was originally reported as a 0.2 percent rise.
The three-month on a year ago growth rate was revised down to 2.5 percent from 2.9 percent, driven by downward revisions to investment by public corporations as well as construction.
But while business investment climbed to 28.126 billion pounds from 28.093 billion in the fourth quarter, levels were revised down. Just one month ago, first quarter business investment was estimated at 29.629 billion pounds.
"While investment growth was revised up in Q1, levels were lower than initially reported and the rise in Q1 proved insufficient to reverse the previous quarter's decline," said George Buckley, UK economist at Deutsche Bank.
"It is the service sector (excluding distribution) alone that kept business investment afloat in the first quarter," Buckley said.
Indeed, services investment grew 1.9 percent on the quarter and 3.8 percent on a year ago while construction and other production fell by 3.6 percent on the previous three months and 3.3 percent on a year ago.
Annual growth in business investment for all of last year was revised down to 3.4 per cent from 5.5 per cent previously, driven by downward revisions to all the main sectors.
On Thursday the ONS revised down its estimate of first quarter economic growth to 0.4 percent from 0.5 percent previously. That was driven down by weaker household spending, which at 0.1 percent barely expanded.
Comments
Comments are closed.