The UK economic system suffered a barely worse begin to the yr than first thought as households squirrelled away money throughout newest lockdowns, revised figures present.
Gross home product (GDP) shrank by 1.6% – in comparison with an preliminary estimate of 1.5% – as renewed stay-at-home measures held again enterprise exercise and spending, in accordance with the Workplace for Nationwide Statistics (ONS).
Newest information confirmed the impression of restrictions in areas corresponding to resorts and eating places, training and manufacturing have been barely worse than at first believed within the January-March interval.
The ONS figures confirmed family spending fell by greater than first feared, dropping by £9.9bn within the first quarter at a time when a lot of the economic system was closed.
In the meantime the family financial savings ratio was 19.9%, its second highest stage on document, the ONS stated.
The measure of how a lot cash individuals have to avoid wasting as a proportion of their general incomes was solely larger within the spring of final yr throughout the first lockdown.
Britain’s economic system shrank by 9.8% final yr on account of the pandemic – the largest decline in three centuries.
It was held again once more in the beginning of this yr because the UK battened down the hatches as soon as extra towards a renewed wave of infections.
However month-to-month information means that the reopening of the economic system since then has helped it begin to get well, with development of two.3% recorded in April.
The Financial institution of England forecasts that general this yr, GDP will develop on the quickest tempo for the reason that Second World Conflict.
Nevertheless, an early estimate of June’s financial efficiency by a closely-watched enterprise survey final week prompt the tempo of the bounce-back could have peaked already, with some elements of the economic system squeezed by provide chain and inflation pressures.
Reacting to the most recent figures, Paul Dales, chief UK economist at Capital Economics, stated: “The small downward revision to Q1 GDP development in all probability will not cease the economic system from rising again to its pre-pandemic peak within the coming months.
“And the bigger rebound within the family saving fee will increase the potential for sooner rises in GDP additional forward.”