UK GDP rises 0.8% in May as pandemic restrictions ease

The UK GDP is estimated to have grown by 0.8% in May, new figures published by the Office for National Statistics (ONS) have revealed.

This is the fourth consecutive month of growth, but remains 3.1% below the pre-pandemic levels recorded in February 2020.

On a quarterly basis, the data shows that GDP grew by 3.6% in the three months to May. The ONS suggested this was mainly because of strong retail sales over the three months, increased levels of attendance as schools reopened from March, as well as the reopening of food and beverage service activities.

Confederation of British Industry (CBI) chief economist, Rain Newton-Smith, highlighted that the easing of COVID-19 restrictions and vaccine continued roll-out had led to another “welcome rise” in activity over May.

“But while more businesses were able to reopen their doors, times remain tough for our hardest hit sectors, particularly aviation and international tourism with some missing out on valuable summer trade to recoup their losses,” said Newton-Smith.

“With further pent-up demand providing an engine for growth, all signs point to a promising economic outlook for the UK over the course of the year. It’s now critical business and government work together to rebuild customer and employee confidence in living with the virus, while also maintaining progress in tackling the pandemic itself.”

Fidelity International associate director for personal investing, Emma-Lou Montgomery, added: “While GDP remains 3.1% below its February 2020 level, there is a chance this could be surpassed in the next few months. The outlook remains positive.

“The UK is set on its roadmap to ‘freedom day’ but cases are rising, challenges in the labour market persist and the initial spending boom could slow in pace, all of which might impact growth.

“While policymakers continue to watch how the economic game plays out, indications are that there won’t be any knee-jerk reactions to temporarily strong growth or inflation.”

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