UK economy makes feeble recovery in first quarter

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Britain's economy recovered only modestly at the start of the year, hindered by a sharp drop in construction and making it likely that the Bank of England will keep rates at record lows for some months.

Britain's economy expanded by 0.5 percent between January and March, in line with forecasts, after contracting by the same amount in the final three months of 2010.

That means Britain's economy has barely grown since September and is lagging other leading economies.

The reading is weaker than either the Bank of England or Office for Budget Responsibility had pencilled in earlier this year and is likely to fuel opposition criticism of the government 's austerity measures, many of which have yet to kick in.

Construction fell by 4.7 percent on the quarter, its biggest drop since the first quarter of 2009 when Britain was deep in recession.

Services and manufacturing both posted solid growth over the quarter, expanding by 0.9 percent and 1.1 percent respectively.

However, the recovery overall looks set to be too weak to convince the majority of Bank of England policymakers to raise interest rates, despite inflation running at twice the cen tral bank's 2 percent target.

The Office for National Statistics said the rebound was little more than an arithmetic effect following the Q4 contraction and the underlying growth picture was broadly flat.