‘Auto industry and trade with EU helped in UK’s February recovery’
DATA SHOWS EASING OF LOCKDOWN AND VACCINE ROLLOUT WILL HASTEN BOUNCE-BACK
BRITAIN’S economy grew by 0.4 per cent in February from January as companies prepared for the lifting of a third coronavirus lockdown, according to official data which also showed a partial recovery in postBrexit trade with the European Union.
However, the data also showed that the fall in gross domestic product in January was not as severe as previously estimated, down by 2.2 per cent compared with the initial reading of a 2.9 per cent drop.
Britain’s economy shrank by almost 10 per cent last year, its biggest slump in more than three centuries and a more severe fall than in most European economies, as the country was battered by the pandemic. “The economy showed some improvement in February after the large falls seen at the start of the year,” an ONS spokeswoman remarked.
Tuesday’s (13) data showed GDP remained 7.8 per cent below its level a year earlier, shortly before the pandemic swept Europe, and was 3.1 per cent lower than its level in October, before the two latest lockdowns hammered Britain’s huge services sector.
Still, a fast rollout of Covid-19 vaccines has raised the prospect of a bounce-back this year and in 2022.
Non-essential shops and outdoor hospitality venues reopened on Monday (12) and prime minister Boris Johnson hopes to relax most coronavirus restrictions before the end of June.
Growth in February was helped by a first rise in factory output since November, led by car manufacturing after two months of contraction when the industry struggled with a global shortage of microchips.
Wholesalers and retailers saw a pick-up in sales which helped the services sector to grow by 0.2 per cent. There were signs that trade between Britain and the European Union partially recovered in February after a hit in January, the first month of a new post-Brexit trade relationship.
British goods exports to the EU, excluding non-monetary gold and precious metals, were 41.4 per cent below year-ago levels in January, but partially recovered to be 12.5 per cent below year-ago levels in February. Imports, which dropped 19.2 per cent on yearago levels in January, were 11.5 per cent below year-ago levels in February.
Trade volumes between Britain and the European Union rose in late 2020 as businesses stockpiled goods in anticipation of border delays in 2021.
“Despite the evidence of partial recovery from the substantial January falls in some commodities, it is still too soon to determine to what extent the monthly changes in trade for January and February can be directly attributed to the end of the transition period,” the ONS said.
“Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels,” the ONS spokeswoman added. “However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”
The UK’s phased reopening, in tandem with speedy vaccinations, has sparked hopes for a rebound in economic activity in the current second quarter or three months to June.
The Bank of England has forecast that growth will recover strongly this year towards its pre-Covid level owing to the nation’s speedy vaccine programme.