UK economy shrinks 1.5% as lockdowns force businesses to close

Rishi Sunak UK economy
UK GDP contracted 1.5% after a third national lockdown forced businesses to close
// UK economy shrinks during first three months of 2021
// UK GDP contracted 1.5% during the quarter
// The service sector, which includes retail, grew 1.9% during March

New research has found that the UK economy shrank during the first three months of 2021 as lockdown measures affected recovery.

UK GDP contracted 1.5 per cent during the quarter after a third national lockdown forced businesses to close, according to the ONS.

A month-by-month breakdown shows that GDP fell by 2.5 per cent in January, but rose by 0.7 per cent in February, and again by 2.1 per cent in March.

READ MORE: Retail sales rise after easing of lockdown, but not yet out of the woods

The GDP is 8.7 per cent below pre-pandemic levels, seen in the last quarter of 2019.

Compared with the same quarter in 2019, when the initial economic impacts of the Covid-19 pandemic began to show, the UK economy fell by 6.1 per cent.

The service sector, which includes retail, grew 1.9 per cent during March, the ONS said, suggesting that retail sales continued to “show strength”.

GDP shrank by almost 20 per cent between April and June last year, while the economy contracted almost 10 per cent across 2020 as a whole.

“Despite a difficult start to this year, economic growth in March is a promising sign of things to come,” chancellor Rishi Sunak said.

“Even with this positive news, we know that many businesses and people still need our help, and that’s why I want to reassure everyone today that our plan for jobs will continue to create, support and protect jobs in the coming months.”

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