UK economy slows down, oil prices reach new record

25 04 2008 United Kingdom

UK economic growth has fallen to 0.4 per cent in the first three months of this year, its lowest performance in three years.

The rate of growth in Gross Domestic Product (GDP) has fallen from 0.6 per cent in the last quarter of 2007 to just 0.4 per cent in 2008, according to the government’s Office of National Statistics.

GDP growth is driven by the UK’s service sector, which suffered from deceleration in business services, finance, transport, storage and communication services. Production output also fell, compared to a rise in growth in the previous quarter.

This follows news of oil prices reaching a record price of $118 a barrel, rising food prices, new mortgages falling to a ten-year low and further weakening of sterling on the world markets.

In spite of the Bank of England’s £50 billion injection in support of mortgage lenders this week, the interest rate on inter-bank loans has risen again to 5.883 per cent, an indication that banks are still very wary of lending to each other.

Back to top of page

© 2008 Copyright topenterprise uk ltd All rights reserved
Property of topenterprise uk ltd and made available under the terms of use notice on this web site