GDP grew by 0.4% in first quarter

According to the ONS, GDP grew by 0.4% in the first quarter, which is a slowdown from the previous quarter, but still higher than the growth we had going into the 2005 general election. It came as a disappointment to those who were claiming that we were "in recession", but still some papers tried gamely to spin this as "Economic Growth lowest in three years".

Looking at the figures, as expected, business and finance had lower growth than in the previous quarter (0.4% compared to 0.6%) and contruction also grew more slowly (0.5% compared to 1.1% in the previous quarter).

Retail held up nicely - but there is evidence that customers are deliberately shifting to the low-priced end of the market - Primark is doing a roaring business for instance. Online sales are also doing better than high street sales and supermarkets like Sainsburys have launched a 25% off sales push to try to wrest customers from their rivals. All of this is a normal response given the way consumers have reacted to the headlines in the press. Retailers will have to cut prices if they want people to buy - not so good for margins but good the customer.