UK economic growth confirmed at 0.7% in first quarter as household saving ratio falls – business live

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The UK economy grew by 0.7% between January and March, but households saved less amid the cost of living crisis, according to the latest official figures.

The GDP growth figure was unchanged from the Office for National Statistics’ previous estimate.

The service industries grew by 0.7% in the first quarter while production expanded by 1.3% and the construction sector eked out 0.3% growth.

The household saving ratio, a measure of how much people save, fell for the first time in two years, to 10.9% from 12%, as they spent more on fuel, rent and restaurant meals.

ONS director of economic statistics Liz McKeown said:

While overall quarterly growth was unrevised, our updated set of figures show the economy still grew strongly in February, with growth now coming in a little higher in March too.

There was broad based growth across services, while manufacturing also had a strong quarter.

The saving ratio fell for the first time in two years this quarter, as rising costs for items such as fuel, rent and restaurant meals contributed to higher spending, although it remains relatively strong.

The ONS said that while the quarterly figure was unrevised, monthly growth was slightly higher than first thought in March, at 0.4% versus its initial estimate of 0.2%. January saw zero growth and February posted expansion of 0.5%, both unrevised.

In April, GDP is estimated to have fallen by 0.3%, largely because of a drop in services output.

The UK-US trade deal has come into effect today, which means lower tariffs for UK carmakers (10%) and the aerospace sector (0%).

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• 9.30am BST: Bank of Engalnd consumer credit and mortgage approvals for May

• 10am BST: Italy inflation for June (preliminary)

• 1pm BST Germany inflation for June (preliminary)

• 8pm BST: ECB president Christine Lagarde speech