UK revised GDP flat on subdued exports, private consumption rises

The United Kingdom revised gross domestic product remained flat from the preliminary figure, only falling from the last quarter, on subdued exports amid an improvement in private consumption spending.

While GDP remained flat at 0.4 pct, exports dipped 0.3 pct, from 0.1 pct in Q4 2015. However, imports eased at 0.8 pct from 0.9 pct previously. Private consumption rose 0.7 pct as against market expectations of 0.5 pct, from 0.6 pct.

Britain's dominant service sector grew 0.6 pct, but industrial output fell 0.4 pct and construction dropped by 1 pct. Manufacturing also witnessed a decline by 0.4 pct.

"The data show an economy reliant on consumer spending to sustain growth, with business investment, construction, manufacturing and exports all in decline," said Chris Williamson, Chief Economist, Markit.

Williamson has also commented that it is unethical to assign the entire blame of a slowdown in UK’s economy to concerns over Brexit uncertainty.

Meanwhile, rising fears of a Brexit is hammering the nation’s growth figures, to some extent. Exports slid on growing consensus for a Leave outcome on June 23. Economists have warned of a rate cut by the Bank of England if such sluggishness continues.

"We believe there is a growing risk that the economy may not bounce back that well after a vote to stay in the EU, as there is the danger that caution among businesses and consumers could persist following a likely very weak second quarter," said Howard Archer, Chief UK & European Economist, HIS Global Insight.