British economic growth slowed to just 1% year-on-year in the latest quarter - the lowest rate for almost a decade - according to preliminary figures that cast doubt over bold government growth forecasts.
British gross domestic product (GDP) inched up 0.1% in the first three months of the year, compared to the previous quarter, leaving the year-on-year growth rate slower than at any time since late 1992, the National Statistics Office reported.
The data confounded the City, which was expecting quarterly growth of 0.4% and annualised growth of 1.3%. Analysts immediately predicted that interest rates would now not go up for several months.
They also said the data could embarrass the government of Prime Minister Tony Blair, which has just produced a budget predicated on strong growth of 2-2.5% this year.
Industrial output continued to decline during the quarter, the official statistics body estimated, as manufacturing and the energy sector contracted. The service sector held steady, surprising analysts who had been looking for further buoyant growth in the segment.
