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April reopening boosts economy growth

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Written by: Emma Lunn
11/06/2021
Britain's economy grew by 2.3% in April as the high street and hospitality sector reopened, according to the Office for National Statistics (ONS).

The figure is the fastest monthly growth since July 2020, as government lockdown restrictions affecting economic activity continued to ease.

April’s GDP remains 3.7% below the pre-pandemic levels seen in February 2020, however it is now 1.2% above its initial recovery peak in October 2020.

Consumer facing services grew by 12.7% in April as coronavirus restrictions eased throughout the month. Retail sales volumes grew sharply with a monthly increase of 9.2%, reflecting the re-opening of all non-essential retail from 12 April in England and Wales, and from 26 April in Scotland.

Non-food stores provided the largest contribution to the monthly growth in April 2021 sales volumes, aided by strong increases of 69.4% and 25.3% in clothing stores and other non-food stores respectively.

Accommodation service activities grew by 68.6% as caravan parks and holiday lets picked up, while food and beverage service activities grew by 39% as pubs, restaurants and cafes could serve customers outdoors.

Other personal service activities, including hairdressing, grew by 63.5% in April 2021, as these businesses reopened.

Danni Hewson, finance analyst at AJ Bell, said: “At first glance there is a lot to be celebrated in the latest set of GDP figures. The UK economy is hurtling down the road to recovery at a rate of 2.3%, slightly faster than had been expected by economists and the fastest it’s travelled since last summer’s reopening boost. Crucially it’s also higher than the peak experienced in October last year demonstrating the resilience of business and the desire of consumers to embrace their newly re-found freedoms.

“Dig into the figures and it’s not a surprise to see the service sector playing a big part. With non-essential retail back in business, hairdressers brandishing scissors once again and the opportunity for all of us to enjoy a meal al-fresco and the boost was a decent 3.4%.

“But the feeling is the recovery is lumpy and delays in lifting restrictions could make it even more bumpy. The service sector is still far below it’s pre-pandemic levels and many in the hospitality sector are concerned about making it through the summer if social distancing continues to constrain sales.”

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