UK GDP rose by 0.8% in May
Despite the renewed easing of lockdown measures, the UK saw its growth slowdown in May, as its recovery lost some momentum.
The Office for National Statistics (ONS) revealed that UK GDP rose by 0.8% in May, well below its expectations of 1.5%.
The figure for May is lower than the 2% growth achieved in April, as restrictions were eased for non-essential retailers.
The economy remains 3.1% below its pre-pandemic level, despite seeing its fourth consecutive month of growth.
The ONS Deputy National Statistician for Economic Statistics Jonathan Athow said: “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.
“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.”
Commenting on UK GDP falling by 0.8%, Ian Warwick, Managing Partner at Deepbridge Capital, said: “Today’s data serves as a further reminder that the UK economy is not out of the woods just yet. We are however clearly moving in the right direction and 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,” Woods added.
