Although GDP posted its smallest quarterly rise since 2012 in the first quarter of this year, we doubt that the economy is on the cusp of a renewed slowdown. The business surveys suggest that Q1’s 0.3% rise will be revised up and/or that quarterly growth will soon revert to rates of closer to 1%. Indeed, there are few signs that uncertainty about the result of Thursday’s general election is harming the economy. Admittedly, the hung parliament that looks highly likely could lead to a more prolonged period of political uncertainty – but even that need not damage the economy significantly. We continue to think that the economy this year will manage to grow at a similar rate to last year’s 2.8% growth.
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