UK recovery slows as more Covid curbs lifted

Britain’s economy grew for a fourth month running in May on further easing of lockdown measures but the rate of expansion slowed more than expected, official data showed yesterday.

GDP output was 0.8% in May as restaurants and pubs welcomed customers back indoors for the first time since the end of last year, the Office for National Statistics (ONS) said in a statement.

That was down on April’s 2% growth rate. The analysts’ consensus had been for a slowdown to around 1.5 percent in May.

“The economy grew for the fourth consecutive month, albeit at a slower pace than seen recently, but remains around three percent below its pre-pandemic peak,” said Jonathan Athow, deputy national statistician for economic statistics at the ONS.

“Pubs and restaurants, who were again able to welcome indoor guests, were responsible for the vast majority of the growth seen in May.

“Hotels also saw a marked recovery as restrictions lifted,” he added.

Output grew 3.6% in the three months to May thanks also to strong retail sales, the ONS said.

But “May’s weaker-than-expected increase in GDP underlines that the recovery to its pre-Covid levels will be drawn out”, forecast Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

He pointed to a fading of some initial enthusiasm when businesses reopened.

“Rising Covid-19 infections also appear to be prompting some people to work from home again and to visit shops and services venues less frequently.”

Following yesterday’s data, UK finance minister Rishi Sunak said it was “great to see people back out and about thanks to the success of the vaccine rollout, and to see that reflected in” the GDP update.

The government on Thursday said that UK residents returning to England from the United States and most European countries will soon no longer have to self-quarantine if fully vaccinated against Covid-19.

The quarantine change will start from July 19, when the government hopes to remove virtually all coronavirus restrictions in England.

Broader plans to ease social distancing, mask-wearing and other virus curbs come despite a surge in infections of the highly contagious Delta variant.

Prime Minister Boris Johnson argues that a successful vaccination campaign has weakened the link between infections and hospitalisations and deaths.