UK economic growth slowed in May despite easing Covid lockdown Business News

The UK economy continues to recover from the shock of the coronavirus, but growth slowed in May despite the easing of lockdown restrictions, figures show.

The Office for National Statistics (ONS) said GDP rose 0.8% in May after rising 2.3% the previous month, disappointing analysts who had predicted a 1.5% increase.

Economic growth in May was largely driven by the service sector, which grew 0.9% after restrictions were eased on hospitality, entertainment and arts businesses on May 17.

Returning customers to restaurants and vacation destinations led the accommodation and food services industry in particular to jump 37.1% from April’s figures.

The ONS added that GDP still had not returned to pre-pandemic levels, reading 3.1% lower than in February 2020. This observation by statisticians comes after the OECD warned that UK employment rates may not return to pre-Covid levels until 2023..

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The economy grew for the fourth consecutive month, although at a slower pace than recently seen.

“Pubs and restaurants, which once again were able to welcome indoor guests, accounted for the vast majority of the growth seen in May. Hotels also saw a marked recovery with the lifting of restrictions. “

Rishi Sunak, the chancellor, said the rollout of vaccines in the UK has enabled people to come out and stimulate economic recovery.

He added: “Our unprecedented package of support – including business loans, the holiday scheme and a reduced VAT rate for the hospitality and tourism sectors – has protected millions of jobs and helped businesses to survive the pandemic. “

However, Labor warned the economy remained fragile. Bridget Phillipson, the shadow chief secretary of the Treasury, criticized the government for “putting the UK through the worst economic crisis of the G7”.

The automotive sector is not doing well in the latest figures from the ONS. A global shortage of microchips led to the biggest drop in production for automakers since April 2020, the agency said, as production of transportation equipment fell 16.5% in May.

Additional reporting by the Press Association

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This notice was published: 2021-07-09 07:27:51

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