UK economy grew by 2.3 per cent in April as government restrictions affecting economic activity continued to ease.
It was the fastest monthly growth of gross domestic product (GDP) since July last year and exceeded economists’ forecast of a 2.2 per cent jump.
In comparison with April 2020, monthly GDP in April 2021 is estimated to have grown by 27.6 per cent.
“Today’s GDP number confirms that the UK is witnessing a strong recovery,” said Emma Mogford, fund manager of Premier Miton.
“The release of pent up demand, as consumers return to shops and restaurants, is significant. Investment by businesses is also picking up, now that there is greater certainty over the outlook post-Covid and post-Brexit.”
Service sector shines
The service sector grew by 3.4 per cent during the month, with consumer-facing services reopening as Covid restrictions eased.
Output in the production sector fell by 1.3 per cent during April, the worst fall since January as three of the four sectors contracted.
Within production, mining output dropped sharply, by 15 per cent, because of planned temporary closures for maintenance of oil field production sites.
To find out more about how we can assist you with your Second Charge Mortgage please click here
Meanwhile, the construction sector contracted by two per cent following a strong March, with new work slowing down faster than repair and maintenance.
“Today’s figures show that although confidence is returning to the construction sector, this remains delicate and growth in specific work sectors is mixed,” said Clive Docwra, Managing Director of McBains.
“While overall output remains just above pre-pandemic levels, driven by an increase in repair and maintenance work, new work contracts declined which bucks recent growth trends.”
Sunak: ‘Promising sign’
April’s GDP remains 3.7 per cent below the pre-pandemic levels seen in February 2020, but is now 1.2 per cent above its initial recovery peak last October.
“Today’s figures are a promising sign that UK 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 per cent from February’s estimate of five per cent.
That would be the fastest annual growth since 1941 when Britain was recovering during World War Two.
“We’ve grown accustomed to erratic GDP figures since the pandemic, but today’s data confirms that the UK reached a turning point in April, when the re-opening of non-essential retail and easing of hospitality restrictions boosted spending,” said Jonathan Sparks, chief investment officer at HSBC.
“Consumer confidence has surged higher in recent months as the reopening continues, which bodes well for more domestically-focused companies.”
By Damian Shepherd
Source: City AM
Discover our Second Charge Mortgage Broker services.