The figure is nonetheless robust relative to other developed economies and means total growth over the past year has been 3.1%.
The service sector’s output was up 0.9%, manufacturing up 0.8% and construction output grew 0.3%. The ONS noted that construction was hit by the high levels of rainfall in January and February.
Bank of America Merrill Lynch said the pace of the recovery over the last year has been far stronger than anticipated. This latest data supports a range of other evidence suggesting that the economy continues to grow robustly, BAML said.
With capacity utilization measures already back to pre-crisis levels and unemployment falling further, BAML expects pressure on the Bank of England to raise rates to continue to build through the remainder of 2014, resulting in a first tightening of 25bps in February 2015.
“Growth in the first quarter was mostly driven by the service sector, but we’re also seeing our industrial base playing an important role in the recovery, with manufacturing output rising steadily,” Katja Hall, CBI chief policy director said. “We expect economic momentum to be maintained throughout the year with a broader-based recovery as business investment takes off,” she added.
