GDP data is out, and the pound plummeted against the dollar trading at around $1.3940 before the release, and then dropped to $1.3798.
Office for National Statistics (ONS) reported that the UK economy grew at the slowest rate yet since 2012 in Q1 of the year.
Due to a sharp decline in construction output and a slow manufacturing sector, GDP growth was at 0.1%, lower than 0.4% in the last quarter.
ONS stated that there was a “relatively slow” effect from the severe weather back in February and March.
Over the first three months of the year, construction had the greatest impact on GDP, having encountered its most intense fall since Q2 of 2012 dropping 3.3%.
Chief of UK economist at Pantheon Macroeconomics, Samuel Tombs, stated that it is doubtful that there will be a rise in interest rates in May: “the chance of a May rate hike is now close to zero following the slowdown in GDP growth in the first quarter”.
He went on to say that due to inflation declining quicker than the MPC predicted and with little progress on wage growth, the MPC could postpone the rise in interest rates.