You are here: Home - Household Bills - News -

Lockdown easing kickstarts economy

0
Written by: Emma Lunn
12/08/2021
UK gross domestic product (GDP) increased by 4.8% in the second quarter of 2021 following the easing of coronavirus restrictions.

According to the Office for National Statistics (ONS), the largest contributors to this increase were from wholesale and retail trade, accommodation and food service activities, and education.

There have been increases in services, production and construction output over the quarter.

Monthly estimates show that GDP increased across all three months at 2.2% in April, 0.6% in May and 1% in June 2021. The level of GDP is now 4.4% below where it was before the coronavirus pandemic in Q4 2019.

Accommodation and food service activities increased by 87.8% in Q2 2021, while wholesale and retail trade increased by 12.8%, in response to the re-opening of indoor hospitality, Euro 2020 and the reopening of non-essential retail. Combined, these consumer-facing services increased by 16.7% in Q2 2021.

Spending on motor vehicles increased sharply by 33.2% in Q2 2021, and is 1.8% above its pre-pandemic level. This rise in demand coincides with the re-opening of car showrooms in England and Wales from 12 April 2021.

Ian Warwick, managing partner at Deepbridge Capital, said: “Although expected with the economy reopening, today’s GDP data is the latest sign of positive growth for the economy. As we continue to focus on economic recovery, it remains critically important that scale-up businesses, particularly in high-growth sectors such as digital technologies and life sciences are supported; as they will be at the very heart of economic growth as we create an economy fit for the twenty-first century.”

Paul Craig, portfolio manager at Quilter Investors, said: “The government will be pleased to see household consumption is driving the economic recovery and will hope this will continue into the summer and beyond as restrictions are now essentially non-existent. With staycations on the cards for the vast majority of the population and air travel tentatively reopening, Rishi Sunak will be hopeful that people keep spending those accumulated savings in the UK.

“There is further optimism for the government too. This Q2 reading will not take into effect ‘freedom day’ and with confidence ever increasing the economy is heading in the right direction. Indeed, the UK was the fastest growing economy in Q2 compared to international peers, something that can be attributed to the huge initial success of the vaccination programme.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week