Economy back from the brink
OUTPUT UP IN MAY AS LOCKDOWN EASES
BRITAIN’S virus crisis-battered economy rebounded sharply this month, a survey has revealed.
Output across the private sector is still shrinking, the research confirmed. But it staged a record recovery from May as Covid-19 restrictions were eased, said number crunchers IHS Markit and the Chartered Institute of Procurement and Supply. And factory output is growing again. Chris Williamson, chief business economist at IHS Markit, said the data “adds to signs that the economy looks likely to return to growth in the third quarter, especially given the further easing of the lockdown from July 4”. But he warned “the longer-term recovery prospects remain highly uncertain”.
The index measures output on a scale, with anything above 50 showing it is growing and below that shrinking.
The reading recovered from just 30 in May to a four-mouth high of 47.6 in June.
Samuel Tombs, of consultants Pantheon Macroeconomics, called the recovery “solid” but added: “The last miles of this marathon recovery will be the hardest.”
The results come a week after the Bank of England said that the impact of the coronavirus lockdown might be less severe than first thought as restrictions ease.
It still reckons the economy will plunge 20 per cent in the first six months of this year but not as bad as the previously estimated 27 per cent drop.
Meanwhile, house sales were up by 16 per cent month on month in May, according to HM Revenue and Customs figures.
Across the UK, an estimated 48,450 residential property transactions took place, still 49.6 per cent down on a year ago.