THE UK economy grew by 2.3% in April when pubs, shops and restaurants could reopen after months of being in lockdown.
It marks the fastest monthly growth since July 2020 when the UK’s Gross Domestic Product – a measure of the size of the economy – grew 7.3%.
The UK economy grew during April when lockdown restrictions eased
But despite the recent growth, the economy still remains 3.7% below what it used to be before the pandemic hit in February 2020, according to latest figures from the Office for National Statistics.
April’s economy boost was driven by the reopening of hospitality businesses and non-essential shops.
But it could have grown even more if it wasn’t for the construction industry, which fell by 2% as firms struggled to get new work, the ONS said.
England’s boozers, restaurants and shops reopened once more on April 12 under stage two of the PM’s roadmap out of lockdown.
Brits could finally grab a pint or a bite to eat outside, while the high street buzzed once more with customers.
It meant that the services industry grew by 3.4% during that month as people splashed cash after rules started to relax, the ONS said.
Clothes stores enjoyed a 69.4% surge, while bars and restaurants saw a 39% rise in growth.
But the services industry at large remains 4.1% below its pre-Covid level in February 2020.
It comes following a slow start to the year, when GDP fell by 1.5% while Covid rules limited the usual New Year spending.
However, the monthly rise from February to March was stronger than expected, indicating a sharp bounce-back as restrictions finally begin to ease.
It led to the Bank of England forecasting that the economy could grow at the fastest rate since World War II, expanding by 7.25% by the end of the year if all Covid restrictions are removed.
But this has been placed under doubt following reports that the June 21 “Freedom Day” could be pushed back by a month so Brits can get two jabs.
“Promising sign” of recovery
Chancellor Rishi Sunak said today’s figures are a “promising sign” that the economy is beginning to recover.
He said: “With more than a million people coming off furlough across March and April and the number of employees in work rising, it is clear that our Plan for Jobs is working.
“But I know there are people who still need our support, which is why the furlough scheme is in place until September to protect as many jobs as possible.”
While market risk advisory firm Validus Risk Management associate Jesús Cabra Guisasola said the economy is “firmly recovering” after taking a hammer blow due to Covid.
However, he warned there are “reasons to be cautious”, as future growth could be dampened by a rise in Covid cases due to the spread of the Delta variant.
Financial services firm Manx Financial Group director of conister Douglas Grant said small businesses have helped to contribute to the growth.
But he added: “We must remember that the UK’s SME debt burden is ballooning, and we are in serious danger of seeing a relentless flow of weak zombie-like companies falling off a loan default cliff.”
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