U.K. Economy Seen Losing Steam in Final Pre-Election Growth DataCraig Stirling and Scott Hamilton
The U.K.’s final release of major economic data before the general election will probably show the weakest pace of growth in more than a year, according to economists.
Gross domestic product rose 0.5 percent in the first quarter, the least since 2013, according to the median of 39 forecasts in a survey of economists by Bloomberg. The Office for National Statistics will publish the data on April 28 in London.
With the election less than two weeks away on May 7, the release will provide fodder for political sparring, illustrating either an extended economic recovery under the governing administration or its fragility. Opinion polls continue to signal a stalemate, with neither the Conservatives in the ruling coalition nor the opposition Labour Party likely to command a majority in Parliament.
“I don’t think the economic picture is particularly bleak but I see a slight moderation in growth,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “It’s a sensitive time for this number to be coming out and it’s likely to be used as a political football by both sides. This number is probably going to be of more interest in Westminster than the markets.”
Forecasts in the survey range from 0.8 percent at SMBC Nikko Securities to 0.3 percent by economists at Goldman Sachs Group Inc. and Schroders Plc. The lower figure would be the weakest in more than two years.
Less important reports on the calendar before the election include Bank of England mortgage and consumer-credit data on May 1, and surveys of purchasing managers the same day.
The GDP report follows figures on Thursday that showed an unexpected 0.5 percent drop in retail sales in March, the final month of the quarter. Jobless data released on April 17 showed benefit claims at the lowest level in four decades and an acceleration in pay growth, providing a potential electoral boost for Conservative Prime Minister David Cameron.
The election campaign refocused on economic matters this week. On Friday, Cameron cited HSBC Holding Plc’s decision to consider moving its headquarters away from Britain as underscoring the need for the country to remain business-friendly. Labour countered that the announcement showed the folly of Cameron’s pledge to hold a referendum on Britain’s European Union membership by the end of 2017, which HSBC cited as a risk facing the economy.