SUBDUED economic growth figures dealt an early blow to Chancellor Gordon Brown's hopes of meeting the revised targets set in this month's Budget.
Estimates from the Office for National Statistics (ONS) show Gross Domestic Product (GDP) growth of 0.2 per cent in the first three months of this year, compared with 0.4 per cent in the previous quarter, as the impact of the Gulf War, weak share prices and high oil prices hit home.
There was a warning that the UK could be further hit by the Sars crisis because of strong export links with countries hit by the epidemic.
Financial advisors Grant Thornton polled 600 businesses and found that one in four exporters traded with the Asia Pacific region and 17 per cent to China.
Earlier this month, Mr Brown forecast growth of two per cent to 2.5 per cent this year, but economists are already questioning if this is possible.
Philip Shaw, chief economist at Investec Bank, said his own prediction of 2.3 per cent had been scaled back to two per cent following yesterday's GDP figure. He said: "This means Mr Brown's forecast of two per cent to 2.5 per cent now looks in jeopardy."
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