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UK economy posts record annual jump in April, up 27.6%

Britain’s economic output in April was a record 27.6% larger than 12 months before, official data showed on Friday, an increase that reflects recent reopening and the scale of disruption to everyday life early in the COVID pandemic.

The figure matched the consensus of economists polled by Reuters.

In April alone, output rose by 2.3%, marking the fastest growth since July, the Office for National Statistics (ONS) said, and compared with the Reuters poll consensus for a 2.2% increase.

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But British economic output is still 3.7% lower than in February 2020, before the pandemic led to lockdown measures.

“Today’s figures are a promising sign that our economy is beginning to recover,” finance minister Rishi Sunak said in a statement.

Last month the Bank of England raised its forecast for British economic growth in 2021 to 7.25% from February’s estimate of 5.0%.

That would be the fastest annual growth since 1941 when Britain was rearming during World War Two. But it comes after output plunged by almost 10%, the biggest drop in more than 300 years.

Source: CNBC

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UK economy 7-10% below pre-Covid levels

Bank of England governor Andrew Bailey on Thursday said UK economic output in the third quarter was between seven and ten per cent below pre-pandemic levels.

While this was far better than at the start of the pandemic, Mr Bailey warned there was still an unprecedented level of uncertainty and that the risks to the economy are still to the downside.

“We think, in the third quarter, on average, activity in the economy will probably (have been) somewhere between seven and ten per cent below pre-Covid levels,” he said in an online conference.

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“And while that number was obviously much better than we had in the spring, it’s still… produced a very big recession.” Recent official data have shown that the UK economy shrank by a fifth in the second quarter which coincided with Britain being in lockdown.

Mr Bailey added that the economy faced the prospect of an “uneven” recovery as the British government battles a second wave of rising infections with tighter restrictions, particularly on the hospitality sector.

“When you look at areas of activity in the economy that require more close social interaction, it’s no surprise that they have been the weakest to recover,” he said.

“Other areas of the economy have actually recovered very strongly – and a few areas of the UK are ahead of where they were pre-Covid.”

Source: The Business Times