GDP in Britain rose by 2.3% in April on strong retail spending
The UK economy expanded in April by the quickest rate since the coronavirus opening last summer.
Gross Domestic Product in Britain increased by 2.3% in April, setting the country up for a solid performance during Q2.
Having slightly exceeded economists’ forecasts, the value of goods and services produced was 3.7% below its level from February 2020, before the pandemic. This is the smallest gap since the beginning of the economic crisis.
Jonathan Athow, ONS deputy national statistician for economic statistics, said: “Strong growth in retail spending, increased car and caravan purchases, schools being open for the full month and the beginning of the reopening of hospitality all boosted the economy in April.”
Hinesh Patel, portfolio manager at Quilter Investors, commented on what the data reveals about the path of the UK economy:
“Given this GDP reading covers April and doesn’t quite take into account all of the lockdown easing we have seen to date, the government will be pleased with the direction the economy is heading. Consumers are clearly making up for lost time and the government will be hoping they continue to spend the lockdown savings many have been fortunate to accumulate,” Patel said.
“Real-time data, such as restaurant and holiday bookings, also remains robust after the initial surge in April and we are seeing discretionary spending hold up as things look to get back to normal. There is obviously uncertainty about the last step of easing going ahead on time and Sunak will not want any delay to be long lasting. But, given the depths of where we were last year, the economy is clearly returning to health. The removal of social distancing when the time comes will give an additional turbo charge to the economy.”
“Much of this optimism though is fairly priced into markets, however, and the Bank of England won’t be able to sit on their hands if the economic recovery strengthens further. With inflation concerns persisting, although slightly overblown in our opinion, Bailey and co may need to act sooner than they may wish.”