UK business investment tumbled by even more in the first quarter of this year than estimated initially, data from the Office for National Statistics showed yesterday, adding to the growing tome of weaker economic data.

The ONS said yesterday that business investment fell by a seasonally-adjusted 1.8% between the fourth quarter of 2007 and the first three months of this year. It had put the drop at 1.4% on May 22.

This greater fall in business investment looks like another piece of the economic jigsaw which is likely to make the Bank of England's Monetary Policy Committee resist any temptation to raise UK base rates from 5% if it can at all help it, amid surging inflationary pressures.

Further detail on the state of the economy in the first quarter will come today with publication by the ONS of final gross domestic product data for this period. The ONS is expected by economists to leave first-quarter growth unrevised at 0.4%.

Investment by the manufacturing sector tumbled by 6.7% during the first quarter. Investment in construction and other production dropped by 7.9% at a time when the fall-out from the global credit crunch was starting to bite in the commercial property and housebuilding sectors.

In the UK's dominant service sector, investment grew by an anaemic 0.6%.

Business investment totalled £36.5bn in the first quarter, the ONS said yesterday, with private and public sector manufacturing accounting for £3.75bn of this, construction and other production £4.65bn, services £27.1bn, and public corporations outwith the manufacturing sector contributing the remaining £974m.

In spite of the bigger fall in business investment during the first quarter, revisions to previous data meant the year-on-year rise in the opening three months of this year was revised up from 3.7% to 4.5%.

However, the MPC would seem likely to attach greater importance to the more up-to-date part of the business investment data as it deliberates over the extent to which the economy is slowing.

Howard Archer, chief UK economist at consultancy Global Insight, said: "The factors supporting business investment through 2006 and 2007 are now waning markedly, and this is being compounded by markedly tighter credit conditions.

"Specifically, business investment was supported by extended robust final demand through 2006 and most of 2007, generally high business confidence, increased capacity pressures in a number of sectors, strong corporate balance sheets and elevated profitability. In addition, tighter credit conditions only had a very limited impact on investment late on in 2007."

Archer added: "Business investment seems set to be markedly weaker in 2008 in the face of tight lending conditions, markedly softer final demand, weakening profitability and sharply lower business confidence, reflecting heightened concerns and uncertainties over the economic outlook.

"In addition, the serious downturns in the commercial property sector and the housing market seem certain to weigh down heavily on construction investment."

He noted the point made in the May report of the Bank of England's regional agents that "while investment intentions had been easing since April 2007, the recent sharp slowdown was attributed to uncertainty about growth prospects and, increasingly, tighter credit conditions."

Archer pointed out the Bank agents' June survey had shown a further decline in investment intentions.

He said: "We expect substantially softer business investment to be a significant factor causing UK GDP growth to slow markedly from 3.0% in 2007 to 1.6% in 2008 and 1.2% in 2009."