UK GDP exceeds expectations for March
The UK economy grew by 2.1% in March, at better than expected levels, in what was the fastest month of growth since last August.
The Office for National Statistics (ONS) said on Wednesday that economists previously predicted growth of 1.3%.
The UK economy also showed resilience during the second wave of the pandemic, as it contracted by 1.5% during Q1 of 2021, seeing strong growth in March. Again, expectations were surpassed, as a contraction of 1.7% was initially forecast.
During Q1 the economy was supported by government spending, as the government increased spending on vaccinations and testing, while consumer spending and business investment dropped as the third lockdown came into effect.
The Bank of England stated a week ago that it expects the UK economy would recover quickly as coronavirus restrictions are lifted to grow by 7.25% in 2021 as a whole.
“Despite a difficult start to this year, economic growth in March is a promising sign of things to come,” UK chancellor Rishi Sunak said.
“As we cautiously reopen the economy, I will continue to take all the steps necessary to support our recovery.”
Commenting on UK GDP rising 2.1% in March, Ian Warwick, Managing Partner at Deepbridge Capital, said: “Today’s monthly GDP estimate reveals the fastest monthly growth since August 2020 and is further evidence that the economy is moving in the right direction at a significant pace.”
“As we focus on economic recovery, it remains critically important that scale-up businesses, particularly in high-growth sectors such as digital technologies and life sciences are supported; as they will be at the very heart of economic growth as we create an economy fit for the twenty-first century.”
“Government initiatives such as the Enterprise Investment Scheme (EIS) have never been more important for helping entrepreneurs and innovators source the funding they require, whilst also offering private investors with tax incentives to develop UK-supporting private equity portfolios. With our EIS funds reaching record levels of funding in 2020/21 it is evident that there is considerable demand from investors and financial advisers alike to invest in early-stage UK companies which we believe will be at the forefront of our economic recovery.”
