The US economy barely grew in the first quarter of this year, as it was held down by a decline in business investment, a strong currency and a severe winter.

In its report release this week, the Commerce Department said that GDP in the world largest economy grew by a mere 0.2 per cent in the first quarter following the 2.2 per cent growth seen in the fourth quarter of 2014.

Consumer spending, the biggest part of the economy, rose 1.9 per cent, a little better than projected.

Despite this, Federal Reserve policy makers left open the possibility of raising interest rates in the second half of this year. Following a two day FOMC meeting Janet Yellen and her team of economists blamed the winter slump partly on “transitory factors” and reiterated their belief that growth will pick up to moderate pace.

In the eurozone, lending by banks to companies and households rose for the first time in three years signaling that the ECB monetary stimulus is finally having an impact on the real economy. According to the European Central Bank (ECB), bank lending in the countries that share the euro currency increased by 0.1 per cent in March from a year earlier.

In the meantime, the UK economy slowed in the first quarter of 2015 according to an initial estimate by the Office for National Statistics. GDP in the country grew by 0.3 per cent in the January-March period compared with the last three months of 2014 when quarterly growth was 0.6 per cent.

That is the weakest growth rate since late 2012 when there were fears that Britain was tipping back into recession. Economists polled in a Reuters survey predicted growth of 0.5 per cent. Preliminary figures are often revised upwards, but with a general election next week, that may be little comfort to Prime Minister David Cameron. The economy has been central to Mr Cameron’s pitch to voters.

This report was compiled by Bank of Valletta plc for general information purposes only.