UK economic growth slows in Q1: data

Business investment falls ahead of EU referendum

LONDON, May 26, (Agencies): Britain’s economic growth slowed in the first quarter of 2016 compared with the previous three months, official data showed Thursday, confirming last month’s reading.

Gross domestic product (GDP) grew 0.4 percent between January and March, the Office for National Statistics (ONS) said in a second estimate, matching the initial figure given in April.

That marked a slowdown from 0.6-percent expansion in the fourth quarter of 2015.

However, it was also the thirteenth consecutive quarter of positive growth since early 2013.

The economy expanded in line with market expectations as rising household spending offset falling exports and business investment.

Business investment in Britain fell in annual terms for the first time in three years in the first quarter amid uncertainty around a vote on the country’s European Union membership.

The Office for National Statistics confirmed the economy slowed in the January-March period, rising by a quarterly 0.4 percent as expected in a Reuters poll, and the data showed consumers continued to drive the economy.

The economy grew by 2.0 percent versus a year ago, against expectations that the data would confirm an initial estimate of 2.1 percent annual growth in the first quarter.

Many economists expect growth in the April-June period to slow further.

Business investment fell by 0.4 percent year-on-year in the first quarter after rising 3.0 percent in the fourth quarter of last year. The ONS said the fall was driven by weaker investment in offices and other non-residential buildings.

Economists had expected business investment fall 0.1 percent from JanuaryMarch period of last year. LONDON, May 26, (RTRS): Britain’s government said on Thursday it had started discussions on overhauling the deficitladen British Steel Pension Scheme, a major stumbling block for potential buyers of Tata Steel’s UK assets.

With serious offers now on the table for Tata Steel UK, Britain’s government is racing against time to find a way to put the company’s British pension fund on a sound footing to help facilitate a sale.

The consultation is looking at separating the pension scheme from Tata Steel and reducing its outgoings, while avoiding a collapse into the Pension Protection Fund (PPF), a government safety net that would leave many pensioners worse off.

Steel industry trade unions said it would be an “unmitigated disaster” if the scheme were allowed to fall into the PPF.

The British Steel Pension Scheme (BSPS) is one of Britain’s largest defined benefit plans, with 130,000 members.

Even with a solvent employer sponsoring it, the scheme’s £14 billion ($20.6 billion) of liabilities exceeds its £13.3 billion in assets.

Britain’s steel industry has been hit by cheap Chinese imports, high energy costs and a global supply glut. India’s Tata said in March it wanted to sell its remaining plants in the country, putting 15,000 jobs at risk and adding to the political pressure to find a rescue plan.

The consultation process concludes on June 23, the date of a politically divisive referendum on Britain’s membership of the European Union.

The government said it was giving consideration to a proposal put forward by the BSPS and supported by Tata.

This would keep the pension scheme intact but require new legislation to allow a reduction in future benefits — an almost impossible task under current regulations.

“Although this would entail future pension increases being cut back from their current levels, benefits would be more generous than those provided by the PPF for the vast majority of scheme members,” said Allan Johnston, chair of the board of trustees of the BSPS.

Its annual increases in pension payments are linked to retail price inflation, but the new legislation would allow the BSPS to benchmark them against consumer price inflation (CPI), which is much lower.

A steel worker holds a placard as he takes part in a protest march through central London on May 25. Britain’s business minister Sajid Javid met Tata Steel bosses in Mumbai ahead of a crunch board meeting on Wednesday expected to discuss potential buyers for its loss-making UK assets. Tata Steel, Britain’s biggest steel employer, announced in March that it planned to sell its Port Talbot

plant in Wales and other assets, putting 15,000 jobs at risk. (AFP)