The UK economy slid back into recession. During the first three months of the year, UK GDP contracted by 0.2% Q/Q, in stead of growing marginally as was expected by the market consensus. The Bank of England had already warned that another contraction in GDP was not excluded due to the poor performance of construction. In the first quarter construction activity contracted by 3.0% Q/Q, but also the performance of the other sectors is disappointing. The services sector grew only marginally (0.1% Q/Q) during the first three months of the year, while production industries continued to contract (-0.4% Q/Q). At the moment, only the production breakdown is available. The expenditure breakdown, published on the 24th of May will give us a more detailed breakdown. Although GDP came out materially weaker than expected, it is not really a big surprise as the Bank of England had already warned that GDP would be depressed by construction in the first quarter. We believe therefore that this outcome shouldn’t materially alter the BoE’s view for the (important) May meeting.