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GDP decline was worse than expected in latest lockdowns as savings increased | Economic news

Britain’s economy has had a slightly worse start to the year than initially thought, as households spent money in the latest lockdowns, revised figures show.

Gross domestic product (GDP) declined by 1.6% – compared to a initial estimate of 1.5% – because the renewal of home support measures has slowed down business activity and spending, according to the Office for National Statistics (ONS).

The latest data showed that the impact of restrictions in areas such as hotels and restaurants, education and manufacturing was slightly worse than previously believed at the start of the January-March period.

People celebrate being out for the evening in Old Compton Street, Soho, in central London, where streets have been closed to traffic to create outdoor seating areas for bars and restaurants to reopen 04 / 12/2021
The reopening helped GDP start to recover

ONS figures showed household spending fell more than expected, falling by £ 9.9bn in the first quarter at a time when much of the economy was shut down.

Meanwhile, the household savings rate was 19.9%, its second-highest level on record, the ONS said.

The measure of how much money people need to save as a proportion of their overall income was only higher in the spring of last year during the first lockdown.

Britain’s economy shrank 9.8% last year due to the pandemic – the biggest drop in three centuries.

It was put on the brakes again earlier this year as the UK again closed the hatches against a new wave of infections.

But monthly data suggests that the reopening of the economy since then has helped it start to recover, with growth of 2.3% recorded in april.

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“Thank goodness” for recovery – but relatively weak long-term, says BoE governor

The Bank of England forecasts that overall this year, GDP will grow at the fastest rate since World War II.

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This notice was published: 2021-06-30 06:29:00

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