The magnitude of today’s slowdown comes as something of a surprise. Economists expected today’s data to show a marginal fall from 0.6 percent in the final quarter of 2014 to 0.5 percent in Q1 of this year. Ben Brettell, Senior Economist, Hargreaves Lansdown.

In fact the services sector grew at 0.5 percent, but the overall figure was dragged down to 0.3 percent by a 1.6 percent fall in construction output, a 0.1 percent fall in production and a 0.2 percent fall in agricultural output. Stewardship of the economy is a key battleground in the upcoming election. Overall the UK economy is about 4 percent bigger than its 2008 peak and has expanded 8.4 percent since the Conservative-led coalition took charge in 2010. However, today’s bigger-than-expected drop is sure to be seized upon by opposition parties as evidence the UK recovery is faltering.

While today’s data is undoubtedly disappointing, it doesn’t represent cause for undue pessimism. This is a first estimate, produced by the ONS using less than half of the data which will eventually be available. As such it will be subject to revision in the months to come. Don’t forget that even the much vaunted double-dip recession in 2011/12 was eventually revised out of the statistics altogether.

Forward-looking PMI (Purchasing Managers’ Index) survey data released earlier this month indicated a broad-based expansion, and indeed Markit (the company which conducts the surveys) had forecast growth of 0.7 percent in Q1. Given the positive recent PMI readings, it is entirely possible that today’s figure will eventually be revised upwards. Furthermore the data is likely show an improvement over the rest of the year. Real wage growth, helped by record low inflation, should keep consumer spending buoyant, and growth of 2.5-3 percent in the year as a whole looks achievable.The most recent Bank of England minutes noted that the decision to keep rates on hold was ‘finely balanced’ for two committee members. Today’s disappointing growth figures are likely to postpone any calls for higher rates for now.