UK economy advances despite lockdown

14 April, 2021 12:00 AM printer

LONDON: Britain's economy rebounded slightly in February despite coronavirus curbs while exports of goods to the European Union recovered a bit more, data showed Tuesday, sparking optimism over the outlook.

Gross domestic product rose by 0.4 percent in February, after shrinking by 2.2 percent in January, the Office for National Statistics (ONS) said in a statement, noting a boost in industrial output and consumer spending.

"The economy showed some improvement in February after the large falls seen at the start of the year," an ONS spokeswoman remarked.

Activity grew despite England's latest Covid-19 lockdown, which was implemented in early January but partially eased this week on the back of a rapid vaccination drive, reports AFP.

From Monday, pubs were allowed to serve drinks outside -- and non-essential retailers and hairdressers reopened as well.

The phased reopening, in tandem with speedy vaccinations, has sparked hopes for a rebound in economic activity in the current second quarter or three months to June.

"January was probably the low point of the year as vaccinations and the reopening of the economy will combine to trigger a rapid rebound in activity over the next few months," said Capital Economics economist Thomas Pugh.

"Given there was no change in the lockdown restrictions in February, GDP was never going to shoot back up."

Pantheon Macro economist Samuel Tombs added that "the economy continued to adapt to lockdown rules in February".

The Bank of England has forecast that growth will recover strongly this year towards its pre-Covid level owing to the nation's speedy vaccine programme.

The economy had tanked by 9.8 percent last year, Britain's biggest slump in three centuries -- and the worst G7 performance.

The ONS added Tuesday that the economy remains 7.8 percent smaller than its pre-pandemic level in February 2020.

January's economic decline nevertheless marked an improvement from the previous estimate of a 2.9-percent contraction.