Time for a quick recap.

• Britain’s slowdown has been confirmed, with new GDP figures showing the economy only expanded by 0.1% in the first three months of 2018. Hopes that last month’s preliminary growth figures might be upgraded were dashed, with the data also showing growth of just 1.2% in the last year.

• Business investment shrank by 0.2% during the quarter, while household spending only rose by 0.2% - the weakest reading in over three years.
  
  
• The Office for National Statistics warned that the UK economy performed poorly in the first quarter. Manufacturing growth slowed to 0.2%, while the services sector only grew by 0.3%, and construction output shrank sharply.
  
  
• The ONS also stuck to its guns that last winter’s snow didn’t hurt particularly hurt growth - something the Bank of England disagrees with.
  
  
• The figures highlight how Britain’s growth rate has lagged behind most rivals in the last year:

Costas Milas of the University of Liverpool argues that the Office for National Statistics should get credit for not changing its growth estimates today:

Praise for the ONS should be in order. Since the Brexit vote, the ONS has really stepped up its game as the median difference between the first and the revised reading for annual GDP growth is zero(!).

In other words, the professional work of the ONS suggests that UK policymakers, already consumed by Brexit-related uncertainty, do not have to deal with big data revisions that would challenge further their policy decisions.”

John Hawksworth, chief economist at PwC, hopes that growth will pick up this year.

He writes:

“The ONS left their estimate of first quarter GDP growth unchanged at 0.1%, with construction and retailing being the main sources of weakness on the output side. They also continued to downplay the negative influence of adverse weather conditions on the figures, in contrast to the views of the Bank of England and indications from some business surveys that this was a more significant factor.

“On the expenditure side, subdued growth of consumer spending of just 0.2% was an important factor behind the slowdown, although retail sales bounced back strongly in April so we expect somewhat stronger growth in the second quarter.

“Business investment was also weak, falling by 0.2% in the first quarter, though perhaps surprisingly total fixed investment growth was relatively strong at 0.9%. This reflects the fact that both government investment and private housebuilding investment were recorded as rising by more than 3% in the first quarter, which is surprising given the weakness of construction output in this period. There could well be some revisions to come in the future to iron out these apparent inconsistencies in the stories told by the output and expenditure data on investment.

“Overall, the figures confirm the view that UK growth was subdued in the first quarter, though we continue to believe that this overstates the underlying weakness of the economy, bearing in mind the strong jobs growth we’ve seen. We expect some recovery in the second quarter, with GDP growth of around 1.3% for 2018 as a whole.”

That’s probably all for today. Thanks for reading and commenting, and have a great weekend. GW

Back in the financial markets, the euro has hit its lowest level since last November as political tensions swirl in Italy and Spain.

The single currency has shed half a cent against the US dollar to $1.166, as investors worry that the eurozone crisis is flaring up again.

The selloff was sparked by the news that Spanish PM Mariano Rajoy faces the prospect of a no-confidence vote. The opposition Socialist party called the vote this morning, accusing Rajoy’s party of staining Spanish democracy.

The move came after 29 members of Rajoy’s Popular Party were jailed in a massive corruption scandal. PP’s former treasurer, Luis Barcenas, was jailed for 33 years.

This has prompted calls for Rajoy to call fresh elections; the PM, though, is standing firm.

News of the no-confidence vote has sent shares sliding in Madrid, where the Spanish IBEX index has fallen 2%.

Spanish government bonds are also being sold off with gusto, sending the yield (interest rate) on the debt spiking.

Italian bonds are also suffering, as investors worry that its new populist-controlled government will clash with Europe over fiscal policy.

Newsflash: UK home furnishing’s chain Dunelm has just dropped a nasty surprise on the City - a profits warning.

It’s another sign that consumer spending in the UK is fragile, with wages only growing slightly faster than inflation.

Dunelm has told shareholders that trading conditions have become “materially more challenging” in recent weeks, with fewer visitors to its outlets.

Like-for-like takings at the company’s stores, which sells bedding, rugs, garden furniture, curtains and lights, are down 4.7% this quarter.

Online sales, though, are up 43.7%. But even so, the company now believes profits will be “moderately” below last year’s £109.3m.

Shares in the company have plunged by 9%.

Nick Wilkinson, chief executive, says:

‘We have seen an unexpectedly challenging start to the fourth quarter, with continuing softness in the homewares market and reduced footfall to our stores.

Wilkinson, who was only appointed in January, is due to leave the company in the autumn.

Britain’s growth report doesn’t look too good when compared to other major economies.

With quarterly growth of 0.1%, and annual growth of 1.2%, the UK is behind most of its rivals.

For example, Germany expanded by 0.3% in Q1 2018, and by 2.3% over the last year.

France also grew by 0.3% in the quarter, or 2.1% annually.

Even Italy, a perennial eurozone laggard, beat Britain with quarterly growth of 0.3% and annual growth of 1.4%.

America expanded at a faster pace - with growth of 0.6% in the quarter, and 2.9% over the year.

Japan, though, bucked the trend by contracting by 0.2% in January-March.

Our economics correspondent, Richard Partington, says today’s GDP report will fuel fears over the UK economy.

He writes:

The weakest household spending for three years and falling levels of business investment dragged the economy to the worst quarter for five years, official statisticians have confirmed.

The Office for National Statistics confirmed its previous estimate that GDP growth slumped to 0.1% in the first quarter, while sticking to its view that the “beast from the east” had little impact.

The latest figures will further stoke concerns over the strength of the UK economy, amid increasing signals for deteriorating growth as Britain prepares to leave the EU next year. Some economists, including officials at the Bank of England, thought the growth rate would be revised higher as more data became available.

Threadneedle Street delayed raising interest rates earlier this month following the weak first GDP estimate, despite arguing that the negative hit to the economy from heavy snowfall in late February and early March had probably been overblown. Instead the ONS said it had seen a longer-term pattern of slowing growth in the first three months of the year.

The Office for National Statistics isn’t pulling its punches -- it says Britain’s economy put in a poor performance at the start of this year.

The ONS’s head of GDP Rob Kent-Smith said:

“Overall, the economy performed poorly in the first quarter with manufacturing growth slowing and weak consumer-facing services. Oil and gas bounced back strongly, however, following the shutdown of the Forties pipeline at the end of last year.

“While there was some evidence of the poor weather hitting construction and high street shopping, this was offset to an extent by increased energy supply and online sales.”

Britain’s hotels and restaurants were the worst-performing part of the UK services sector in the last quarter.

The ONS reports:

• transport, storage and communications increased by 0.4%
• business services and finance increased by 0.4%
• government and other services increased by 0.1%
• distribution, hotels and restaurants decreased by 0.1%

On the industrial side, manufacturing grew by a modest 0.2% while energy production was stronger (because it was so chilly!).

Here’s the details:

• electricity, gas, steam and air conditioning increased by 2.5% (2.3%)
• mining and quarrying increased by 2.2% (3.5%)
• manufacturing increased by 0.2% (unrevised)
• water supply industries decreased by 1.0% (negative 0.3%)

Bloomberg points out that UK household spending rose at the slowest rate since 2015 - a sign that consumers are cautious.

They say:

U.K. consumer spending lost momentum in the first quarter and companies cut investment after severe weather swept the country.

Household spending rose just 0.2 percent, the weakest performance in more than three years, and business investment declined 0.2 percent as snowstorms kept shoppers at home and hit construction projects.

Newsflash: It’s official, UK growth slowed to just 0.1% in the first three months of 2018.

The second estimate of GDP, just released, confirms that growth slowed to a five-year low in the first three months of this year.

The Office for National Statistics reports that the pattern of “slowing growth” continued in the last three months, as consumer-facing industries suffered a slowdown.

Britain’s building sector actually shrank during the quarter, while the dominant services sector grew by 0.3%.

Importantly, the data also shows that business investment shrank in January-March 2018. That may be a sign that firms are reluctant to spend on new offices, factories and equipment while Brexit remains so uncertain.

Household spending rose though.

The ONS says:

• The services industries increased by 0.3% in Quarter 1 2018; while construction decreased by 2.7% in Quarter 1 2018.
• Household spending grew by 0.2%, while business investment decreased by 0.2% between Quarter 4 2017 and Quarter 1 2018.

More to follow!

Today’s growth figures come just hours after the Bank of England’s governor warned of the economic costs of a disorderly Brexit.

Mark Carney said that failure to agree a smooth transition deal would have damaging consequences. This could force the BoE to launch emergency measures, such as an interest rate cut.

Carney told the Society of Professional Economists in London last night that a Brexit crisis could force the Bank to allowing inflation to spike (because the pound would tumble), rather than hiking interest rates and sending the economy sliding into recession.

As Carney put it:

From a monetary policy perspective, the bank is ready for Brexit.

Although the exact policy response cannot be predicted in advance, observers know from our track record that, in exceptional circumstances, we are both willing to tolerate some deviation of inflation from target for a limited period of time and that there are limits to that tolerance

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Never mind GDPR. What really matters today is GDP - and whether Britain really slipped to the brink of stagnation at the start of 2018.

Updated growth figures from the Office for National Statistics will give a better insight into the state of the UK economy. They will probably confirm that growth fell to a measly 0.1% in January-March, the weakest quarterly growth rate in five years.

The data will also give a more detailed breakdown of the economy, showing how business investment and household spending changed.

Economists had originally expected that the economy expanded by 0.4% in Q1, so last month’s first estimate of GDP was a nasty shock.

It’s possible that the growth rate could be revised up from 0.1% to 0.2% this morning, which would bring some cheer to the markets.

Indeed, the Bank of England has pretty much said that it thinks the original data is too gloomy, and that bad wintery weather hit growth. But there are also worries that weak consumer spending, and uncertainty over Brexit is hurting the economy.

A weak growth report would also reduces the chance of UK interest rates rising in the next few months, and hit the pound.

Michael Hewson of CMC Markets says:

Today’s second estimate of Q1 GDP is expected to come in at 0.1% unchanged from the previous estimate and given the poor weather in March it would be a surprise if any of the other indicators were revised higher, though we could see exports revised up to 0.5%.

Also coming up today:

European markets are expected to recover some of yesterday’s losses, as fears over North Korea abate slightly.

Overnight, Pyongyang signalled it was still willing to hold a summit with the US - despite Donald Trump cancelling June’s meeting.

We also get a new estimate of German business confidence, and new US durable goods sales (machinery, large electrical devices and the like).

The agenda:

• 9am BST: IFO survey of German business confidence in May
  
• 9.30am BST: Second estimate of UK growth in the first quarter of 2018
  
• 1.30pm BST: US durable goods sales figures for April