The UK economy grew at the weakest pace in three years in the first quarter, as oil output dipped and the credit squeeze weighed on business services and construction, official data showed on Friday.

The Office for National Statistics said growth in gross domestic product eased from 0.6 per cent in the last quarter of 2007 to 0.4 per cent in the first quarter of 2008, broadly as expected but the weakest since the start of 2005. The annual growth rate fell from 2.8 per cent to 2.5 per cent.