Britain’s economy remained sluggish at the start at this year. GDP expanded by just 0.5 percent between January and March from the previous quarter.
Following the slump due to bad weather late last year, it means the UK economy has effectively flatlined since last September.
The figures make it all but certain the Bank of England will not increase interest rates in the UK next week.
The data set the stage for a tough 2011 for Britain’s economy, as the government starts in earnest with a four-year programme of public spending cuts.
Sterling rallied as investors drew a sigh of relief that key sectors of the economy, such as manufacturing and services grew at a healthy pace. Services grew by 0.9 percent on the quarter and manufacturing by 1.1 percent.
But overall growth was held in check by sluggish loan activity, despite government attempts to encourage banks to increase lending to businesses.