Britain’s robust economic growth is showing its first signs of a slowdown at the start of the year, according to a major rating agency.

As the UK chancellor prepares significantly upgrade Britain’s economic forecasts at today’s Budget, S&P Global Ratings has warned that consumer-driven growth that powered expansion in 2016 is already slowing down.

“The UK economy is gradually losing momentum,” said Boris Glass, economist at S&P.

Robust household spending in the aftermath of the Brexit vote surprised forecasters including the Bank of England, which has twice upgraded its short-run forecasts for GDP growth since the June vote.

Still, survey data at the start of the year has pointed to consumer spending tailing off, softening in the housing market, and rising inflationary pressures.

Mr Glass notes:

Looking at the recent monthly flows, net consumer credit actually slowed recently–notably in December and January–where seasonally adjusted unsecured lending to households was, at £1 billion and £1.4 billion, significantly lower than the £1.6 billion average in the 11 months to November 2016.

In our view, this is a sign that the consumer spending spree that almost entirely drove GDP growth in 2016 is likely to have started cooling.

But softer growth will mean the BoE will keep its record low interest rates on hold and “see through” accelerating inflation, added the report.

Read more: 6 reasons for UK resilience since the Brexit vote

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