British economy’s rebound seems promising. Why’s that?
The British economy grew faster and strongly than expected in March, gathering speed for a rebound from its Covid-19 plunge of 2020. Official data showed on Wednesday that the reopening of schools alongside coronavirus testing and vaccinations bolstered activity in the public sector. Furthermore, consumers began spending some of their lockdown savings. All of these prompted the 2.1% growth in February.
Analysts had expected monthly growth of 1.3% for Britain’s economy. Ana Boata, the head of macroeconomic research at trade credit insurer Euler Hermes, stated that businesses and the government alike would feel this data marks a turning point. This week the prime minister confirmed that the government is easing restrictions. So, this could be the start of a long hot summer for British businesses.
The country was under a third lockdown over the first three months of 2021. As a result, gross domestic product decreased by 1.5%, according to the Office for National Statistics.
Samuel Tombs, an economist with Pantheon Macroeconomics, noted that even though the hit was less severe than analysts initially feared, it still meant Britain would likely remain the laggard among the Group of Seven rich countries.
What about British GDP?
British GDP may grow by 5% in the April-to-June period. The BoE announced last week it expected the economy would rebound quickly as the country speeds ahead with Europe’s fastest vaccination program and Covid-19 restrictions are lifted.
The central bank’s forecast for 7.25% growth in 2021 would be the fastest since a Second World War rush. However, GDP tumbled down by 9.8% in 2020, its deepest plunge in over three centuries.
Finance minister Rishi Sunak stated that economic growth in March is a promising sign of things to come despite a difficult start to this year.
Britain’s economy is currently 8.7% smaller than at the end of 2019. According to the BoE, it will return to its pre-pandemic size by the end of the 2021.