London, June 28: The British economy expanded at its weakest pace in 11 years in the first quarter, as businesses and consumers retrenched in the run-up to the war in Iraq, revised official data showed on Friday. The Office for National Statistics (ONS) said that GDP rose by only 0.1% in the first quarter, lower than the 0.2% previous estimate and average forecast by analysts. The ONS said this was the weakest growth rate since the second quarter of 1992, when the British economy was struggling out of recession. On the year, GDP rose by 2.1%, down from the 2.2% estimate last month and the weakest rate in a year.
Markets mostly shrugged off the data as dealers reckoned that the Bank of England will be looking to more recent figures when it meets next to set interest rates. The BoE last cut borrowing costs in February to a 48-year low of 3.75% and many analysts expect it to cut again in the next few months, if the economy keeps showing signs of weakness. Bureau Report