The latest data suggests that despite the first quarter contraction in UK GDP, economic conditions are improving amid the rapid vaccine rollout, the boost from the easing of restrictions and continued government support.
However, with many firms struggling with the damage done to their cashflow by over a year of Covid restrictions, the risk of a marked slowing in economic output as government support winds down remains uncomfortably high.
The key statistics mentioned in the review are as follows:
- The UK economy contracted by 1.5% in Q1 2021. However, there was growth of 2.1% in March as lockdown measures eased.
- Retail sales increased by 9.2% in April after a rise of 5.2% in March.
- Business investment in the UK decreased by 11.9% in Q1 2021. Investment is now 18.4% below its pre-pandemic level.
- CPI inflation doubled in April to 1.5%, up from 0.7% in March.
- Supply chain price pressures are also rising. The inflation rate for goods leaving the factory gate rose to 3.9% on the year to April 2021, up from 2.3% in March.
- The unemployment rate declined from 5.1% to 4.8% in the three months to March 2021.
- UK exports of goods to the EU fell by 18% in Q1 2021, while exports of goods to non-EU countries rose by 0.9%.
To read the full economic review, click here.