Snow hit to economy “halved UK economic growth” in first quarter
The UK economy's growth rate halved in the first quarter compared to the end of last year thanks to bad weather brought by the so-called Beast from the East, according to a group of influential economists.
An estimates of GDP by the National Institute of Economic and Social Research (Niesr) points to output growth of only 0.2 per cent in the first quarter of 2018, down from 0.4 per cent for the final quarter of 2017.
Most economists believe the bad weather – including heavy snow and serious flooding – put a dampener on economic activity, although the Niesr estimates are below economists' consensus estimates.
Read more: Multiple snow storms cripple high street retail sales in March
Amit Kara, head of UK macroeconomic forecasting at Niesr, said the severe weather “is likely to have disrupted activity in all major sectors of the economy", denting growth in spite of a "small offset" from increased industrial production thanks to the Fortis oil pipeline shutdown, the conduit for a major chunk of North Sea oil production.
However, the weather-related hit to the economy may be temporary, with spending in the first quarter pushed back until the second quarter in what is expected by some economists to provide an equal boost to the economy.
Read more: UK services sector frozen by weakest performance since Brexit vote
Kara added that previous bouts of serious weather had played havoc with official statistics, with major revisions to initial estimates in similar instances in the past.
Any revisions this time could complicate the efforts of observers of the UK economy as they try to gain an accurate picture of activity ahead of a crucial period for British business as the UK leaves the EU.
Most economists believe the UK economy will slow this year, with the latest consensus of City forecasts released by the Treasury pointing to 1.5 per cent growth in 2018, down from 1.7 per cent last year – although newer forecasts predict growth of 1.6 per cent.
Read more: Snow no: Construction activity shrinks in March after unusually bad weather
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