THE British economy grew at its slowest pace in five years in the first quarter of 2018, prompting disappointment from Downing Street and raising doubt over a Bank of England interest rate hike next month.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.1 per cent in its initial estimate for January to March.

It was the weakest quarterly growth since the fourth quarter of 2012 and worse than economist predictions for a slowdown to 0.3 per cent. That compares with 0.4 per cent in the final quarter of 2017.

Downing Street said the GDP figures were “clearly disappointing”, but insisted that the fundamentals of the economy remain “strong”.

Scotland’s Q4 GDP figures were released earlier this month, with the data continuing to show construction exacting a downward pull on overall growth.

Services were the largest contributor, but as highlighted by the ONS, the trend suggests that growth in services is weakening, especially in consumer-facing industries.

Commenting on the growth figures, Liz Cameron, chief executive and director at Scottish Chambers of Commerce said: “It is disappointing to see such low levels of growth in the UK economy overall.

As highlighted by the ONS, the Beast from the East likely impacted on certain sectors of the economy, particularly petrol sales within the retail industry. Areas like construction continued to experience falls in output across all months of the quarter, providing further evidence that the drivers of this slow growth are broader.

“Our recent Quarterly Economic Indicator showed that many sectors of the economy were looking to invest to meet expectations for the future. In order to do this however, it is critical that respective governments act to provide both policy certainty, and the infrastructure upgrades desperately needed to keep the UK competitive.”

“The UK, and Scotland within it, need to return to historical levels of growth to achieve the shared prosperity that all elements of civic society want to see. Business will lead on this, but we need government to push forward on the infrastructure upgrades.”

Asked if uncertainty surrounding Brexit had contributed towards the near-standstill in growth, a No 10 spokesman said: “Our economy has remained resilient. Growth was stronger than many expected after the referendum. What the Government has been working towards has been providing certainty for business.

“The agreement on the implementation period was an important step providing certainty for businesses.”

While many thought the so-called Beast from the East would have hit Britain’s economy hardest, official figures showed that recent snowfalls had a relatively small effect on growth.

ONS spokesman Rob Kent-Smith said: “Our initial estimate shows the UK economy growing at its slowest pace in more than five years, with weaker manufacturing growth, subdued consumer-facing industries and construction output falling significantly.

“While the snow had some impact on the economy, particularly in construction and some areas of retail, its overall effect was limited, with the bad weather actually boosting energy supplies and online sales.”

The pound tanked in the wake of the release as traders revised interest rate expectations. Sterling tumbled as much as 1.1 per cent versus the greenback to 1.375 and dropped 0.9 per cent against the eurozone currency to 1.138.