The preliminary estimate of UK Q1 GDP confirmed that the British economy grew by 0.5% Q/Q in the first three months of the year, barely making up the value lost in the last quarter of 2010. And the details are even less inspiring! Private consumption fell by 0.6% Q/Q, the second consecutive contraction, and also gross fixed capital formation dropped sharply (-4.4% Q/Q), also the second straight quarter of contraction. Weakness was however offset by a strong boost from net exports and also government consumption added to growth (1.0% Q/Q). Finally UK exports are profiting from the weakness of sterling, which is the positive sign from the GDP data, indicating that the economy is rebalancing. Overall, the GDP breakdown shows a weak picture with both consumer spending and investments suffering. The outlook for the UK is bleak as export growth is forecasted to weaken due to a slowdown in the global recovery and also government consumption will probably weaken in the coming quarters due to the austerity measures.