UK economy grew by 1.8% in May but still quarter below pre-lockdown levels

Britain's high streets have seen a swathe of shop closures. Credit: PA

The UK economy shrank by 19.1 per cent in the three months to May, according to the latest data.

The Office for National Statistics show despite the UK's economic contraction, there has been signs of recovery, as GDP grew by 1.8 per cent in May.

However, despite May’s GDP growth, it was far short of the five per cent rise expected by many economists.

The ONS said the economy eked out growth as manufacturing grew by more than eight per cent during the month, as did construction.

Despite the month-on-month increase in gross domestic product (GDP), output is still a long way from recovering from the record falls seen in March and April when Britain was in full lockdown – and was 24.5 per cent lower compared with February before the crisis struck.

However many sectors of the UK economy remained closed during May. In England, outdoor markets and car showrooms reopened from June 1, while non-essential retail opened on June 15.

Pubs, bars and restaurants only reopened in England on July 4, while Scotland and Wales have typically been slower in reopening their shops, bars and restaurants.

Jonathan Athow, deputy national statistician at the Office for National Statistics (ONS), said of the May economy figures: “Manufacturing and house-building showed signs of recovery as some businesses saw staff return to work.

“Despite this, the economy was still a quarter smaller in May than in February, before the full effects of the pandemic struck.

“In the important services sector, we saw some pick-up in retail, which saw record online sales.

“However, with lockdown restrictions remaining in place, many other services remained in the doldrums, with a number of areas seeing further declines.”

(PA Graphics) Credit: PA Graphics

ITV News Business and Economics Editor Joel Hills tweeted: “All things considered, the economic bounce back in May was disappointing.

“The Bank of England believes that the recovery began earlier and was stronger than it had expected but there’s no sign of that yet in the ONS data. The 'v' [recovery] currently looks very lop-sided.”

Alpesh Paleja, lead economist at the CBI business group, said: “The latest data sheds further light on just how much the economy has been affected by lockdown.

“While recent indicators suggest we have turned a corner, it’s clear many sectors are still in acute distress.

“Sadly, the legacies of this crisis will likely be felt for some time.

“The Chancellor’s summer statement was an important step forward, but many viable firms remain in danger as a result of reduced cash flow and a lack of consumer demand.”

Other countries across the world have been hit hard by coronavirus, with Singapore’s economy forced into recession in the last quarter.

It’s economy shrank by 41.2 per cent compared to the previous quarter, the country’s biggest contraction on record.

Authorities forecast it will be the worst recession since independence from Malaysia in 1965.