What's going on?

The UK economy isn�t doing great but isn�t doing terribly bad either. It grew by 0.4% in the first quarter of 2016, which was in line with expectations but lower than the growth of the previous quarter.

What does this mean?

This news signals that the UK is on track to grow less this year than it did last year. Uncertainty as a result of June�s Brexit referendum is being blamed by most economists as a key driver of the weakness (i.e. companies are probably postponing spending money until they have a clearer idea of Britain�s future relationship with the European Union). But there are also concerns that�the relatively high value of the pound versus, say, the Euro (remember, a more valuable currency makes it tougher to sell goods overseas) and the somewhat weaker employment situation�are also weighing down economic growth.

Why should I care?

For the markets: Markets are pricing in much less of a Brexit risk than they were just a few weeks ago. The pound is close to a 10-week high versus the US dollar as there seems to have been an uptick of support for the �Remain� campaign. The pound had sold off as a vote for Brexit appeared to be gaining in popularity; this was because it�s thought that foreign money would leave the UK if it voted to leave the EU, which would put lots of pressure on the value of the pound.

The bigger picture: Still, the UK likely grew faster than the US or eurozone (they report later). The US probably didn�t grow even half as much as the UK in the first quarter, while Europe�s moderate recovery is likely losing momentum. These data points are only initial estimates, so they will almost certainly be revised over the coming months as more detailed information becomes available. But it�s still the best indication we currently have of the UK�s economic performance.