The UK experienced a fourth consecutive month of growth in May as some businesses such as indoor restaurants reopened, although its pace slowed by 0.8% compared to previous months.
The economy was particularly supported by the reopening of indoor restaurants, sports courts and museums, which had been closed since late December, restricting activities involving large indoor gatherings, including nightclubs.
Growth slowed in May compared to March (+ 2.4%, figure revised upward) and April (+ 2%, figure revised downward), when control began at the end of December, began to rise .
On the other hand, factories for transportation equipment, including automobiles, saw a 16.5% drop in their production in May due to disruption caused by a shortage of microprocessors, the Office of National Statistics (ONS) said on Friday.
The ONS states that gross domestic product (GDP) declined by 1.6% in the first quarter, slightly higher than the 1.5% initially estimated.
Overall, GDP is down 3.1% from its February 2020 level, the ONS said, before the shock of the pandemic. All hygiene measures still in force should be lifted on 19 July.
“It’s great to see people everywhere return for the success of the vaccination campaign and to see that in the economic growth figures,” said Economy and Finance Minister Rishi Sunak.
On the other hand, Paul Dales of Capital Economics estimates that May’s growth is much below average by analysts (+1.8%) and even more disappointing given that leading indicators show that the recovery in June lost some momentum”.
“This probably means that the recent increase in Covid-19 cases and the postponement” of the lifting of all health restrictions, initially scheduled for June 21, is “slowing down the recovery”, says – He does.
Capital Economics therefore now believes that activity in the United Kingdom should return to its pre-pandemic levels “in October”, and no longer in August, as previously expected.
The key PMI Flash Index for June from IHS Markit found that economic activity in the United Kingdom slowed slightly in June, but remained very strong, with a record hiring rate.
Looking at the glass half full, Richard Hunter, Interactive Investor Analyst, points to “high levels of savings in the UK, meaning consumers have money to spend”.
In addition, given the constraints and uncertainties over changing conditions for overseas travel, “despite the lifting of restrictions”, the country may have “several people already booked holidays”, giving a boost to the national economy.
Britain is one of the developed countries hardest hit by the pandemic, with a historic GDP decline of nearly 10% last year, and nearly 130,000 deaths.
The country is currently experiencing a surge in Covid-19 cases due to the delta variant, even though the number of deaths is much lower at this time than in previous waves.