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A U.K., Union Jack Flag flies in front of the Houses of Parliament, in London, U.K., on Monday, Feb. 15, 2016. U.K. lawmakers are not the only ones bracing for a tough few months before Britain's referendum on its European Union membership. A gauge of expected volatility for the pound near the highest since 2011 shows traders are expecting a rough ride too.Jason Alden/Bloomberg

Just a few months ago, the British economy seemed unstoppable. Job growth was strong, consumer confidence high and by the end of 2015, Britons had enjoyed 12 consecutive quarters of economic growth. Now all that is over and some are blaming the Brexit debate.

A host of recent economic indicators have illustrated the depth of the slowdown. Manufacturing output and construction activity have dropped to the lowest levels in three years, retail sales are down and the economy grew 0.4 per cent in the first quarter of 2016 from the previous one, which had a 0.6-per-cent gain. That was about the same growth rate as France, a habitual laggard, and the second quarter is expected to be even slower.

And while the unemployment rate remains at a low 5.1 per cent, there are worrying signs in some sectors such as manufacturing, which saw 20,000 jobs lost in the past three months. The steel sector has also been particularly hit hard with India's Tata Ltd. putting its entire British operations up for sale, saying the plants were too inefficient. That move has threatened more than 15,000 direct jobs.

Not that long ago, the Bank of England had been expected to begin raising rates this year because the economy was growing so fast. The bank will announce its latest rate decision on Thursday and no one expects an increase that day or any day this year. The best guess now is for rates not to rise until the middle of next year, or later.

The souring economic picture has become fodder in the campaign for the June 23 referendum on whether Britain should remain in the European Union.

Those backing the remain side, including Chancellor of the Exchequer George Osborne, say the figures show that the Brexit debate is already having a detrimental impact on the economy as businesses and investors pull back.

Those campaigning to leave the European Union, such as former London mayor Boris Johnson, say it's the EU that's holding back the British economy because of all the expense and red tape.

So who is right?

"We can blame the Brexit debate to some extent," said Scott Corfe, an economist with the London-based Centre for Economics and Business Research. "If you look at a lot of the business confidence surveys, they suggest that the Brexit referendum has led to a decline in investment intentions. You have seen some investment go out as businesses decide to wait and see."

But Mr. Corfe added that Brexit is only part of the story. Some of the stalled investment will return once the outcome of the referendum is known, especially if Britain votes to remain.

"I think the slowdown is more than [Brexit], and it reflects a wide range of factors," he said.

He cited slowing exports due to weakness in the euro zone economies, which combined with weakness in investment has held back growth.

And the country's large financial services sector was hit especially hard by the global market turmoil early in 2016.

"The main problem with the U.K. economy at present is that we are incredibly reliant on consumer spending to drive growth," he said.

He noted that spending has been driven by falling unemployment, low inflation and some pickup in earnings growth.

But there are signs consumer confidence is waning. The latest retail sales data showed a decline over the past two months.

The slowdown in first-quarter economic growth was largely expected, but several economists and organizations have now lowered their growth forecasts for 2016.

"Softer growth forecasts for the U.K. economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted," said a report from Tim Moore, a senior economist at Markit, which conducts the manufacturing and construction surveys.

Bank of England Governor Mark Carney has also expressed concern that the Brexit debate is hurting the economy and the bank's monetary policy committee said it had seen some softening of growth during the first half of 2016 due to the referendum.

Those on the Brexit side insist the economic fears are overblown.

"Far from the picture of gloom painted by the government, it is clear the City of London would not only retain its pre-eminence as the world's most important financial centre, but would also thrive after freeing herself from the EU's regulatory shackles," said Vote Leave chief executive officer Matthew Elliott.