LONDON: Britain’s economy began to recover strongly at the end of the first quarter despite only minor easing of lockdowns, official data revealed on Wednesday.
Gross domestic product jumped 2.1 per cent in March, the Office for National Statistics said, although by not enough for the UK economy to avoid contracting overall in the first quarter.
GDP shrank by 1.5pc in the first three months of 2021 compared with the final quarter last year, the ONS said.
The UK is exiting lockdowns at a gradual pace, allowing the economy to further recover from pandemic fallout.
“As we cautiously reopen the economy, I will continue to take all the steps necessary to support our recovery,” finance minister Rishi Sunak said in reaction to the data.
Darren Morgan, ONS director of economic statistics, said the strong recovery seen in March was led by retail and school reopenings, offsetting weakness in the services sector.
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 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 European Union at the start of the year.
The growth recovery tallies with the Bank of England’s 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 7.25pc this year amid vaccine rollouts, the central bank predicted after it upgraded its prior guidance of a 5.0-percent expansion.
But it slashed its projection for 2022 to 5.75pc from 7.25pc as the government looks to claw back some of its vast pandemic-support outlay with higher taxation.
‘True hit’ awaits
“Undoubtedly the true hit to the economy won’t be known until government interventions... end,” said Neil Wilson, analyst at Markets.com.
Analysts have also highlighted concerns that surging inflation, as economies reopen, could hamper growth recovery.
Prime Minister Boris Johnson’s Conservative government has spent more than 350 billion pounds ($487bn) in emergency measures since the outbreak of Covid-19 at the start of 2020.
Published in Dawn, May 13th, 2021