- The UK economy grew 2.4% in March, beating economists’ expectations.
- Britain’s government hopes to lift all restrictions in July, aided by a rapid vaccine rollout.
- The Bank of England expects UK GDP to grow 7.25% in 2021, more than previously thought.
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The UK economy grew 2.4% in March as business and consumer optimism grew as COVID-19 cases fell and the vaccination drive picked up speed, according to the latest estimates released on Wednesday.
Britain’s gross domestic product shrank 1.6% in the first quarter compared to the previous three months, a downward revision by the Office for National Statistics from the initial 1.5% estimate. The drop was driven by a bigger-than-expected fall in consumer spending.
However, figures released earlier in June showed that UK GDP grew 2.3% in April. That left the economy around 3.7% smaller than before the COVID-19 pandemic in February 2020, although those figures may also be revised.
“Today’s GDP release cemented the fact that growth contracted in Q1, but this is fading fast in the rear-view mirror as recent monthly data points to a much rosier picture for the UK economy,” Jonathan Sparks, UK chief investment officer at HSBC Private Banking, said.
Paul Dales, chief UK economist at Capital Economics, said: “GDP rose in each of February, March and April.” He added: “The further reopening in the economy since then means a lot of that gap will have been closed in May and June.”
Britain has been one of the fastest countries in the world to vaccinate its population against coronavirus. More than 65% of people have now received at least their first dose, according to Our World In Data.
It also has one of the highest death tolls from COVID-19 in the world, with over 128,000 fatalities.
The vaccine rollout has allowed the government to gradually reopen parts of the economy, although rising cases caused a delay in June. However, ministers now hope that the final restrictions can be lifted in July.
The Bank of England said in May that it expects UK GDP to grow 7.25% in 2021, up from a prediction of 5% growth made in February.