London: UK economic growth slowed more than economists forecast in the first quarter, dealing a potential blow to Prime Minister David Cameron’s claim that his Conservative Party is best placed to manage the economy’s recovery.

The 0.3 per cent pace was just half the rate of the previous three months and marked the weakest expansion since the fourth quarter of 2012. Economists had forecast a reading of 0.5 per cent, according to a Bloomberg News survey.

With the May 7 election just over a week away, the release will be latched onto by politicians looking to sway voters with their economic credentials. Polls signal the Conservatives, who formed a coalition with the Liberal Democrats after the 2010 election, and the opposition Labour Party are neck-and-neck, with neither likely to win a majority in Parliament.

“Given that the Conservatives and Liberal Democrats are hoping that many undecided voters will ultimately decide to vote for them due to their management of the economy, any slowdown in growth would be very unwelcome news,” Howard Archer, an economist at IHS Global Insight in London, said before the data. He expects growth to pick up again if a “sustainable government” is formed and “political uncertainty wanes.”

The slowdown in the first quarter was led by services, the Office for National Statistics said on Tuesday. The largest part of the economy grew just 0.5 per cent, the least since the second quarter of 2013. Within that sector, business services and finance rose 0.1 per cent, the smallest increase since 2010.

Production fell 0.1 per cent in the January-March period and construction dropped 1.6 per cent. From a year earlier, the economy expanded 2.4 per cent, the least in more than a year.

Election Fodder

Since the last election in May 2010, the economy has grown 8.4 per cent. It has been a central part of the election battle, with Cameron citing falling unemployment as evidence that his economic plan is working. Against that, Labour leader Ed Miliband has said the recovery hasn’t lifted living standards for most people.

While Tuesday’s numbers will be used by politicians as election fodder, ONS Chief Economist Joe Grice warned against “reading too much into one quarter’s figures.”

Forecasts in the Bloomberg survey ranged from 0.8 per cent to 0.3 per cent. Only two of 39 respondents, Goldman Sachs Group Inc. and Schroders Plc, correctly predicted the first-quarter number. The data is based on about 44 per cent of the information that will ultimately be available and may be revised.