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LONDON (Alliance News) - Both major UK political parties sought to take advantage Tuesday after UK economic growth slowed more than economists had expected in the first quarter, while the first-quarter earnings season hit full flow with reports from the likes of BP and Standard Chartered.

Gross domestic product expanded 0.3% sequentially during the three months to end-March, according to a preliminary estimate published by the Office for National Statistics, the slowest growth since the fourth quarter of 2012. The growth rate was forecast to slow to 0.5%, from 0.6% in the fourth quarter of 2014. Output of the dominant service sector rose 0.5%, but was partially offset by a 1.6% decline in the pace of economic output in construction.

The figures, just nine days ahead of the General Election, may prove a blow to the Conservative Party, which had just nudged ahead in the polls on Wednesday. However, Chancellor George Osborne said the figure showed that the UK had reached a critical moment and the recovery couldn't be taken for granted. "The future of our economy is on the ballot paper at this election," he said.

The Conservatives have put the economy firmly at the centre of their re-election attempt, but the message had failed to resonate with voters. Polls on Wednesday suggested that the Tories were starting to nudge ahead, although many commentators put this down to fear that a Labour victory would end in a coalition government with the Scottish National Party.

The BBC and Sky News both have the Tories in the lead in their respective polls of polls now, having had the parties in a dead heat on Monday. Both polls have the Tories ahead on 34% to Labour's 33%.

Labour has been focusing on a lack of wage growth in its election campaign, and Shadow Chancellor Ed Balls responded to the GDP figure by saying it showed the Conservatives and their Liberal Democrat coalition partners had failed to fix the economy for working families, according to the BBC.

However, economists backed Osborne. The preliminary estimates of UK first quarter growth are likely to be upgraded in future as the services sector may have grown better than expected, the British Chambers of Commerce said, while Vicky Redwood, chief UK economist at Capital Economics, said the slowdown in the first quarter should be temporary.

UK housebuilder shares have continued to fall, meanwhile, after Labour leader Ed Miliband said the party would bring in "use it or lose it" powers which would allow councils to encourage building in unused land plots by putting up taxes on undeveloped land. In addition, sites left idle could be compulsorily purchased for use by another developer under the party's plans.

Amid a rash of corporate news, BP said its pretax profit for the first quarter of 2015 was substantially lower than a year ago after its exploration and production division was hit by the lowest quarterly oil price since the start of 2009, and by reduced activity, partially offset by higher earnings at the division which produces fuels and lubricants.

BP reported a pretax profit of USD2.27 billion for the first quarter of 2015, down from USD5.27 billion a year earlier, as revenue tumbled to USD54.92 billion from USD92.98 billion

Its closely-watched replacement cost profit before tax was USD1.87 billion down from USD5.53 billion a year earlier, and the figure excluding non-operating items and accounting effects of USD2.58 billion beat analysts' expectations. BP shares are trading higher.

BP is the first of the listed majors to report first quarter figures. The company reiterated that its dividend is a "priority", even though it continues to "reset and rebalance" BP to meet the challenges of a possible sustained period of lower prices. Capital expenditure was cut to USD4.5 billion in the first quarter, from USD5.4 billion a year earlier.

Standard Chartered, the London-listed but emerging market-focused bank, reported a 22% drop in first quarter pretax profit, due to pressure on operating income and higher charges for bad loans. Operating income fell to USD4.40 billion from USD4.57 billion, which it said was due to exiting businesses and the strength of the US dollar against currencies in emerging markets, while operating expenses edged up to USD2.47 billion from USD2.45 billion due to the need to invest in improvement to the bank's conduct and compliance systems.

The charge for loan impairments increased to USD476 million from USD265 million, driven by "elevated" impairments from its corporate and institutional clients.

Rival HSBC Holdings last week launched a review about where its headquarters should be based, amid continued criticism of the UK government's levy on the banks' global balance sheets, sparking speculation that Standard Chartered may also consider such a move.

Standard Chartered Finance Director Andy Halford told reporters that the bank's domicile is "something the board reviews from time to time" and "one of those evolving things in life", but he said there has been no change in its "overall position" on the matter.

Halford said the bank is estimating that the cost of the UK bank levy will increase to about USD540 million in 2015 from USD366 million in 2014, but that isn't the only factor to take into account when decided where to base the headquarters.

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Markets: UK indices are lower, as Standard Chartered reported a drop in pretax profit and data showed that UK economic growth slowed in the first quarter. The pound recovered its losses to trade higher against the dollar after the GDP report.

US stock futures point to a lower open on Wall Street. The DJIA and S&P are currently set to open down 0.4% and the Nasdaq 100 down 0.1%. Apple shares are set to rise after its second quarter profit rose 33% from last year, driven by strong sales of iPhone and Mac as well as all-time record performance of the App Store. The company's quarterly earnings per share breezed past Wall Street expectations as did its quarterly sales. Apple also said its board has authorized an increase of more than 50% to the company's program to return capital to shareholders.

FTSE 100: down 1.1% at 7,027.85
FTSE 250: down 0.7% at 17,665.84
AIM ALL-SHARE: flat at 755.37
GBP: up at USD1.5289
EUR: up at USD1.0939
GOLD: up at USD1,202.55 an ounce
OIL (Brent): down at USD64.51 a barrel
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Other Top Corporate News
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Royal Dutch Shell and French rival Total have delayed multi-billion dollar offshore oil projects in western Africa as part of a bid to rein in costs and shore up cash flows following the plunge in the oil price, the Financial Times reported. Shell has postponed a final investment decision on the offshore Bonga South West project in Nigeria to next year. The project is estimated to require around USD12 billion of spending by the Anglo-Dutch oil giant.
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Whitbread said its pretax profit rose in its recently-ended financial year as sales in both its Premier Inn and Costa Coffee chains continued to rise, and it has started looking for a new chief executive as Andy Harrison told the board he will retire by the end of the current financial year. Separately, home goods retailer Dunelm Group said Harrison will become chairman on July 7 when Geoff Cooper retires. Harrison is already a non-executive director on the company's board. Whitbread reported pretax profit for the year ended February 26 of GBP463.8 million, up from GBP347 million the year before, as revenue increased 14% to GBP2.6 billion from GBP2.3 billion. Sales at Premier Inn grew 15% while Costa Coffee revenue rose 18%. The company will pay a total dividend of 82.2 pence, up 19% from 68.8p the year before.
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St James's Place reported an increase in funds under management in the first quarter of its financial year, after taking in GBP1.30 billion of net inflows, boosted by higher limits for individual savings accounts and greater flexibility for people saving for retirement in the UK. In a statement, the British wealth management and financial advice company said its funds under management increased by 7% to GBP55.8 billion over the quarter ended March 31.
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Rolls-Royce Holdings said it will sell its Michell Bearings business to British Engines Ltd for GBP12.6 million in cash. The FTSE 100-listed engineering and aerospace group said the deal is set to be completed in the autumn, subject to licence consents.
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WPP said it has made an investment in the USD50 million Series D funding round for fashion and lifestyle media company Refinery29 Inc. WPP is making the investment in the funding round through its WPP Ventures business and said it is partnering with Scripps Networks Interactive, a US media company, on the investment. WPP did not say how much it had invested in the funding round.
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Henderson Group reported a 10% increase in assets under management in the first quarter of 2015, driven by what it said were record quarterly net inflows of GBP3.6 billion, and it also agreed to sell its 40% stake in TH Real Estate to TIAA-CREF for GBP80 million, giving its cash position a boost. The fund manager said its assets under management increased to GBP89.4 billion from GBP81.2 billion in the three months ended March 31. Retail net inflows amounted to GBP2.90 billion, while institutional net inflows amounted to GBP656 million.
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Alliance Trust said it has agreed to appoint two of the directors nominated to its board by activist shareholder Elliott Advisors, a move that marks a compromise in their disagreement ahead of the trust's annual meeting of shareholders. Alliance Trust said that it has agreed "certain mutual non-disparagement undertakings" with Elliott and that the shareholder will not call a general meeting or "seek to agitate" against the company, board or management in public until after the trust's 2016 annual meeting at the earliest. The trust said it has agreed to appoint Anthony Brooke, the former SG Warburg executive, and Rory Macnamara, previously of Morgan Grenfell, to its board. Elliott had also proposed the appointment of Peter Chambers, the former chief executive of Legal & General Investment Management, but he has agreed to stand aside as a candidate.
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Allied Minds reported a wider loss for 2014 as it spent more on research and development, but its key value measure rose strongly. The US-focused science and technology development and commercialisation company reported a net loss of USD45.5 million for 2014, compared with a loss of USD34.5 million a year earlier, as a rise in both R&D and selling, general and administrative expenses more than offset a rise in revenue to USD7.7 million from USD2.9 million. Its closely-watched group subsidiary ownership adjusted value, a measure of the value of the company, rose by almost a third to USD488.0 million, from USD367.3 million at the end of 2013.
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Property and construction services company Kier Group said it has struck a deal to acquire UK-based infrastructure repair and maintenance services company Mouchel. Kier said it will pay GBP265 million in cash to MRBL, the holding company for the Mouchel business, with the deal to be backed by a GBP340 million fully-underwritten rights issue. Kier will offer shares at 858 pence per share on the basis of five new shares for every seven existing shares held.
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Balfour Beatty said it has agreed to sell its 50% stake in the Royal Infirmary of Edinburgh public-private partnership project for GBP72 million. The investment is being acquired by infastructure fund manager Equitix, with the consideration to be paid in cash on completion of the deal, which is set to take place in mid-June. "This transaction again underlines the quality of the investments portfolio and its ability to generate value for shareholders. It also demonstrates our commitment to maintaining a strong balance sheet through self-help as we deliver the first phase of the Build to Last transformation programme," said Leo Quinn, Balfour's chief executive.
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AIM Movers
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Pinnacle Technology Group has risen strongly after it raised about GBP0.9 million by placing 13.2 million new shares at 6.5 pence each, a placing that was done to facilitate a strategic investment by MXC Capital. MXC said it subscribed for 5.9 million of the placing shares, which gives it a 10% stake in Pinnacle's enlarged share capital. It said it has also been granted seven-year warrants over a further 5% of Pinnacle's share capital. Tissue Regenix Group is up after the first clinical trial of its decellularised tendon device, Orthopure XT, was approved by the UK's Medicines and Healthcare Products Regulatory Agency. NetDimensions Holdings is another gainer after it said its revenue and invoiced sales for the first quarter were "substantially ahead" of a year earlier. Rose Petroleum has fallen sharply despite saying test results from the Mancos shale formation within the Uinta Basin acreage in Utah, US, are "in line with expectations" and it plans to conduct a six well drilling programme starting in late 2015 after identifying its "top targets". Stellar Resources is down after the companies behind the Horse Hill project in the northern part of the Weald Basin in the UK moved to clarify press comments surrounding the Horse Hill licenses and their expiry dates, the latest effort to cool media scrutiny of the oil find that was initially flagged as potentially blockbuster.
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Other Top Economics And General
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Loans approved for house purchase in the UK rose to the highest level in six months during March, data from the British Bankers' Association showed. The number of loans approved for house purchase climbed to 38,751 from 37,453 in March. Economists had expected an increase in the figure to 38,700. The latest figure was the highest since September last year, when mortgage approvals totaled 39,376. The BBA said that house purchase approvals were 14% lower than last year in March, but demand increased in the first quarter as a whole.
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Labour's property plans moved to the centre of the UK General Election debate, with fierce criticism of what many considered a retreat to the left by leader Ed Miliband in calling for councils to be given powers to take unused land from developers and over its plans to introduce rent controls on private landlords. Labour faced criticism over plans to seize unused plots of land from property developers. Labour leader Ed Miliband said the party would bring in "use it or lose it" powers which would allow councils to encourage building in unused land plots by putting up taxes on undeveloped land. In addition, sites left idle could be compulsorily purchased for use by another developer, under the party's plans.
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The Conservatives pushed into the lead in the daily YouGov survey and consolidated their lead in both the ICM and Ashcroft polls, as Labour kept pole position in the Populus poll and the Scottish National Party moved further into the lead in the latest TNS poll for Scotland.
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French unemployment rose to a record high in March, data released by the labor ministry revealed. The number of unemployed increased 15,400 or 0.4% from February to 3.51 million in March. The number of job seekers below 25 rose by 5,200 or 1% compared to February.
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The United Nations refugee agency said it is rushing critical supplies to Nepal in the wake of the devastating earthquake last week, while pledging to provide any further assistance needed. The agency is sending 11,000 plastic sheets and 4,000 solar lanterns from its warehouse in Damak, eastern Nepal, to the eastern hilly districts of Ramechhap, Okhaldhunga and Sindhuli. And later this afternoon, an additional 8,000 plastic sheets and 4,000 solar lamps are being flown to the Nepalese capital, Kathmandu, from Dubai via a cargo plane.
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A Saudi-led coalition carried out a new round of airstrikes on Yemeni rebels and allied military units in the south of the country, and on its Red Sea coast. In the key southern city of Aden, local residents said a coalition airstrike aimed at the mainly Shiite Houthi rebels missed its mark, hitting an apartment building and causing civilian casualties. The strike came amid ongoing clashes between Houthi forces and local fighters who have been resisting their presence in Aden, the former capital of once independent southern Yemen.
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The Maryland National Guard started moving into Baltimore Monday night to help control city-wide rioting, looting and arson. Up to 5,000 armed troops will be deployed, in addition to 500 regional police officers from around Maryland, state officials said in a broadcast news conference. At the request of the city of Baltimore, Governor Larry Hogan declared the state of emergency that enabled calling up the National Guard.
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Afternoon Watchlist (all times in BST)

13:55 US Redbook index
14:00 US S&P/Case-Shiller Home Price Indices
15:00 US Consumer Confidence
15:00 US Richmond Fed Manufacturing Index
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Wednesday's UK Corporate Events

Antofagasta - Q1 Production Report
GlaxoSmithKline - Q1 Results
Next - Q1 Interim Management Statement
Home Retail Group - Full Year Results
TSB Banking Group - Q1 Interim Management Statement
Redefine - Half Year Results
Spirit Pub - Half Year Results
Devro - Interim Management Statement
Stagecoach - Trading Statement
Avon Rubber - Half Year Results
British American Tobacco - Q1 Interim Management Statement
Development Securities - Full Year Results
Greggs - Trading Statement
Standard Life - Trading Statement
N Brown - Full Year Results
Weir Group - Q1 Interim Management Statement
Barclays - Q1 Interim Management Statement
London Stock Exchange - Q1 Interim Management Statement
Petropavlovsk - Full Year Results
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Wednesday's Key Economic Events (all times in BST)

n/a UK Nationwide Housing Prices
09:00 Italy Business/Consumer Confidence
10:00 EU Economic Sentiment Indicator
11:00 UK CBI Distributive Trades Survey - Realized
12:00 US MBA Mortgage Applications
13:00 Germany Consumer Price Index
13:30 US Gross Domestic Product Annualized Preliminary
13:30 US Personal Consumption Expenditures Prices
15:00 US Pending Home Sales
15:30 US EIA Crude Oil Stocks change
19:00 US Fed Interest Rate Decision
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