UK economy in recovery mode ahead of lockdown easing

LONDON (AFP) – Britain’s economic recovery began to recover strongly at the end of the first quarter despite lockdown restrictions, official data revealed yesterday.

Gross domestic product (DGP) jumped 2.1 per cent in March, the Office for National Statistics (ONS) said, although by not enough for the United Kingdom (UK) economy to avoid contracting overall in the first quarter.

GDP shrank by 1.5 per cent overall in the first three months of 2021 compared with the final quarter last year, the ONS said.

The UK is meanwhile currently exiting lockdown at a gradual pace, allowing the economy to further recover from pandemic fallout.

“As we cautiously re-open the economy, I will continue to take all the steps necessary to support our recovery,” British Finance Minister Rishi Sunak said in reaction to the data.

ONS Director of Economic Statistics Darren Morgan said the strong recovery seen in March was led by retail and school re-openings, offsetting weakness in the services sector.

A person walks past a temporarily closed clothes shop on Regent Street in central London, where non-essential shops are closed during England’s third coronavirus lockdown. PHOTO: AP

He added that construction grew strongly over the quarter and stood above its pre-pandemic level in March.

Morgan also noted that manufacturing recovered robustly in both February and March.

Meanwhile, “exports of goods to the European Union (EU) continued to increase in March and are now almost back to their December level” before Brexit took place, he added.

“However, imports from Europe remain sluggish in the first three months of the year, being outstripped by non-EU imports for the first time on record.”

Britain formally exited the EU at the start of the year.

The growth recovery tallies with the Bank of England’s (BoE) outlook.

The BoE last week said the UK economy will enjoy a stronger-than-expected recovery this year after the government began easing its coronavirus pandemic lockdowns quicker than anticipated.

It is expected to rebound by 7.25 per cent this year amid vaccine rollouts, the central bank predicted after it upgraded its prior guidance of a 5.0-per cent expansion.

But it slashed its projection for 2022 to 5.75 per cent from 7.25 per cent as the government looks to claw back some of its vast pandemic-support outlay with higher taxation.

The UK economy tanked by 9.8 per cent last year, Britain’s biggest slump in three centuries – and the worst G7 performance – on COVID-19 lockdowns.