UK economy grows for third month in a row as Covid controls ease | Economic growth (GDP)

The UK economy grew by 2.3% in April as the easing of Covid-19 lockdown measures fuelled a rebound in consumer spending, according to official figures.

The Office for National Statistics (ONS) said GDP rose for the third consecutive month as pandemic restrictions were scaled back across all four nations of the UK, with the economy growing at the fastest pace since the July reopening from lockdown last year.

Retail sales grew sharply as non-essential shops reopened, alongside a pickup in bookings for caravan parks and holiday lets, and the reopening of hospitality venues outdoors lifted spending in pubs, bars and restaurants. Overall GDP grew by 1.5% in the three months to April compared with the previous three months.

Rishi Sunak, the chancellor, said the latest figures were “a promising sign that our economy is beginning to recover”. The ONS said the annual rate of growth in April was 27.6%, demonstrating the difference from the worst month of the pandemic a year earlier, as the economy recovers from the biggest collapse in output for more than 300 years.

However, further ground remains to be recovered, with the economy still about 4% below its pre-pandemic level as concerns mount over the fallout from rising Covid infections fuelled by the Delta variant, first detected in India.

The construction sector slipped by 2% in April after strong growth in March, while industrial production slumped by 1.3% as shutdowns in many car plants and large-scale oilfield maintenance work held back stronger growth in the economy.

Frances O’Grady, the general secretary of the TUC, said stronger growth was expected as lockdown rules eased but that the recovery would soon lose momentum if the government did not step up investment.

“We need a much more ambitious plan for green industry and infrastructure,” she said. “It’s a chance to replace the jobs lost in the pandemic and level up the UK. But Britain is only investing £1 for every £16 that’s in President Biden’s green recovery plan.

“The prime minister should use the G7 summit to announce plans that match the ambition of other G7 members or we will be left behind.”

The latest snapshot showed accommodation services grew by 68.6% after overnight stays in self-contained accommodation were allowed again in England. Pubs, restaurants and cafes recorded growth of 39% as venues were able to serve customers in outdoor seating areas, while other personal service activities, which include hairdressing, grew by 63.5% after the reopening of salons and barbershops.

Economists said there was evidence of pent-up demand as consumers were able to return to the high street and hospitality venues outdoors, as progress with the Covid-19 vaccine rollout and rising business and consumer confidence lifted growth. The Bank of England estimates that more than £200bn of savings were built up during lockdown, mainly by wealthier households, which could be used to help power a reopening boom in the economy.

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Growth of 2.3% in April followed 2.1% growth in March and 0.4% growth in February.

Debapratim De, a senior economist at the accountancy firm Deloitte, said: “April and March’s GDP figures provide an early indication of the strong summer recovery coming the UK’s way. Vaccines and better weather seem set to supercharge activity.”

Separate trade figures showed a monthly increase in goods exports to the EU in April, bringing sales closer into line with non-EU nations, and continuing to recover from a 40% collapse in exports to the bloc in January in the first month after Brexit.

Total imports to the UK rose by £1.4bn, while exports fell slightly, by about £100m.