You are here: Home - Household Bills - News -

UK economy shrank more than first thought during third lockdown

0
Written by:
30/06/2021
The UK economy shrank more than first thought at the start of the year as people spent less during lockdown.

Gross domestic product (GDP) decreased by 1.6 per cent between January and March, revised from the first estimate of a 1.5 per cent decline, according to the Office for National Statistics (ONS).

The level of GDP is now 8.8 per cent below where it was pre-pandemic, during October and December 2019.

The largest contributors to the fall were from the education, wholesale and retail trade, and accommodation and food services industries, in particular at the beginning of the quarter in response to the tightening of Covid restrictions.

The household saving ratio reached 19.9 per cent during January and March up from 16.1 per cent the previous quarter, the second highest on record.

Household spending fell as lockdowns were introduced across the country. Spending in restaurants and hotels fell by 37.2 per cent on the previous quarter while transport fell by 13.9 per cent.

Alastair George, chief investment strategist at Edison Group, said: “The GDP figures today are almost ancient history as they reflect lockdown conditions at the start of the year, rather than the surge in activity which has occurred since then. The data are a reminder of the damage lockdowns wreaked on the economy, even as the UK government provided extensive fiscal support.

“Looking forward, current economic conditions are clearly much improved but later in the year there will be a fiscal headwind as the furlough scheme draws to a close. The outlook now hinges on the success of the UK’s vaccine programme in keeping hospital admissions down to acceptable levels.”

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.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

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...

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