Economic Review – April 2021

Posted on 25 May, 2021

Stronger recovery predicted
The UK economy returned to growth in February and survey evidence suggests a strong recovery is imminent, as lockdown restrictions ease and the vaccine rollout continues at pace. Data published by the Office for National Statistics (ONS) showed the economy grew by 0.4% in February, as businesses prepared for the lifting of the third national lockdown. Commenting on the figures, an ONS spokesperson said, “The economy showed some improvement in February after the large falls seen at the start of the year, but remains around 8% below its pre-pandemic level.” While February’s growth rate was below market expectations and the first quarter as a whole still looks on course for a modest contraction, the data does point to an improving situation. Survey evidence suggests economic activity has recovered further in recent months…..

Labour market ‘broadly stable’
ONS has described the jobs market as ‘broadly stable in recent months,’ after its latest set of statistics revealed a small decline in the number of employees on company payrolls, alongside a dip in the rate of unemployment. According to the latest data, 56,000 fewer people were in payrolled employment in March than in February, the first monthly decline in this measure of employment in four months. Over the year to March, a total of 813,000 payroll jobs were lost across the UK, with younger age groups bearing the brunt of these cuts. The country’s latest unemployment rate, however, which covers the December to February period, unexpectedly fell for the second month in a row. The overall rate dipped to 4.9% across the three months to February, down from 5.0% in the previous three-month period…..

Retail sales surge
Official statistics show that retail sales volumes rose significantly in March, while survey evidence points to a further uplift in sales during April and May. According to the latest ONS data, retail sales volumes jumped by 5.4% in March, following the partial recovery that began in February. The increase was largely driven by a strong performance from the clothing sector, as shoppers bought new outfits prior to the easing of lockdown restrictions. Retailers also reported a growth in sales of mobility equipment, as older people went out more following their vaccinations, and an increase in sales at garden centres…..

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