The UK economy almost stalled in the first quarter of 2018 growing by just 0.1 per cent, the Office for National Statistics reported on Friday.
This was down from the 0.4 per cent expansion registered in the final quarter of 2017 and well below the 0.3 per cent City of London analysts had expected.
The pound slumped in the wake of the data, dropping to $1.3804, down 0.8 per cent on the day, as traders bet against a May interest rate from the Bank of England due to the unexpected weakness of GDP.
The Bank had pencilled in a 0.3 per cent GDP expansion for Q1 in its most recent Inflation Report.
"Today’s disappointing data has all but ended any hopes for a May rate hike, with [Mark] Carney and his fellow Monetary Policy Commitee members surely now likely to stand pat and bide their time before tightening policy further," said David Cheetham, of the online trading firm XTB.
The ONS reported that services, which account for 80 per cent of the economy, grew by 0.3 per cent in the three months to March, a slowdown fmo the 0.4 per cent rate in the previous quarter.
However, it estimates that construction output, around 6 per cent of output, slumped by a massive 3.3 per cent.
Manufacturing output, 10 per cent of GDP, eked out growth of 0.2 per cent, well down on the 1 per cent plus growth rates recorded by the sector in the second half of 2017.
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