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UK GDP slumps to a 3 year low, signalling potential trouble ahead for retailers

Published:  28 April, 2015

The UK's economy grew at its slowest pace in three years, expanding just 0.3% in for the first quarter of the year.

The UK's economy grew at its slowest pace in three years, expanding just 0.3% in the first quarter of the year.

This quarter's GDP growth, released today by the Office for National Statistics, was the weakest pace of growth the UK has seen since 2012.

The slowing of the economy and the uncertainty over election outcomes could shake consumer confidence and their willingness to open their wallets - particularly for wine merchants. With the trend for current premiumisation within the category recently, a slower economy may mean people are less willing to splash on luxury goods.

Hannah Maundrell from, said: "For consumers, the message from today's GDP figures is clear: make the most of low prices while they're here, but err on the side of caution with your spending as more difficult times may be ahead. For many that will mean paying down borrowing and setting savings aside 'just in case'."

March did see an improvement in the consumer confidence index over February though according to The Consumer Confidence Board.

Lynn Franco, director of economic indicators at The Conference Board, said March's increase was driven by an improved short-term outlook for both employment and income prospects. "Consumers were less upbeat about business conditions. Consumers' assessment of current conditions declined for the second consecutive month, suggesting that growth may have softened in Q1, and doesn't appear to be gaining any significant momentum heading into the spring months."

Retail figures slid slightly according to the ONS last month, which were down 0.5% for March.

Mundell noted it was important to remember that economy is still growing despite the slowdown in GDP.

"It's a relief to see the economy has continued to grow despite uncertainty at home and abroad, however, there's been a notable slowdown," she said.