During the first quarter of this year, the US economy grew at the slowest rate in two years due to restrained consumer spending and as companies tightened their belts as a result of weak global financial markets and the drop in oil prices.

The Commerce Department data, published last week, showed that GDP increased by a 0.5 per cent annualised rate following a 1.4 per cent fourth-quarter advance. This growth rate was less than the 0.7 per cent median projected by economists and was the third straight disappointing start of year.

Data showed that unstable global markets and the drop in oil prices resulted in the largest decline in business investment in seven years. Household spending increased by the least since early 2015. Federal Reserve officials last week acknowledged the softness in consumer spending but reiterated that strong hiring and revenue gains have the potential of enhancing consumer spending and boosting economic growth.

Britain’s economic growth slowed in the first quarter of this year as it was affected by a fall in manufacturing and construction output. Data by the Office for National Statics shows that GDP rose by 0.4 per cent between January and March, down from 0.6 per cent in the fourth quarter. On an annual basis, the UK economy grew by 2.1 per cent.

This quarter’s growth rate of 0.4 per cent met economists’ expectations and marks the 13th consecutive quarter of positive growth for the UK. Part of the slowdown was due to a sharp fall in construction output, which dropped by 0.9 per cent in the first quarter.

Finally, survey results by Ifo Institute for Economic Research showed that German business confidence deteriorated unexpectedly in April as businesses were less satisfied with their present situation. The Ifo Business Climate indicator fell to 106.6 in April, while economists had projected the measure to increase from March’s score of 106.7 to 107.

Although enterprises were to some extent less satisfied with their existing situation, their business projections improved once again. The present situation measure of the survey fell to 113.2 from 113.8. Economists had projected the score to stay at 113.8.

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