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Brexit Blame Game Set to be Reignited

First-quarter U.K. growth numbers due Wednesday

The tug of war that's dominating U.K. politics is about to get another bit of economic rope.

One week after a row over whether a rise in jobless numbers was to do with uncertainty stemming from Britain's referendum on its European Union membership, the statistics office will publish first-quarter gross domestic product data on Wednesday. With the numbers forecast to show a slowdown, campaigners for and against Brexit may seek to hijack the release for their cause.

Economists predict a deceleration to 0.4 percent from 0.6 percent, prompting questions about what's behind the weaker expansion. While the pace has been easing for a while, the Bank of England has said the referendum may be playing a part.

With the vote just under two months away, officials said increased uncertainty may be delaying company decisions such as share sales, private-equity deals and commercial real-estate transactions. This could lead to “some softening in growth” in the first half, they said.

So, Brexit takes some of the blame, but there's more to it.

With growth so imbalanced — almost totally reliant on services and consumers — and the weak European and global backdrop, there was always a risk that some momentum would be lost. At the same time, the start of 2016 was dominated by markets tumbling on jitters about the outlook for China.

Here's Nicholas Gartside, from JP Morgan Asset Management:

“Markets love exaggerating things and people as well. When you look at the U.K. and if you take a step back, it's slowing. And that’s not to do with political noise or anything like that, it's just really where we are in the cycle.”

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