Economic Review – February 2021

Posted on 08 March, 2021

UK economy poised for recovery
Although the latest gross domestic product (GDP) statistics revealed the UK suffered a record slump in 2020, there are now growing hopes the economy is on the cusp of recovery. Figures published by the Office for National Statistics (ONS), showed the UK endured a record fall in output last year as coronavirus restrictions ravaged the economy. Across the whole of 2020, GDP fell by 9.9%, more than twice as much as the largest previously recorded annual decline. However, the data did reveal a positive growth rate across the final three months of the year, meaning the UK avoided a double-dip recession. Furthermore, in the month of December alone, the economy actually grew by 1.2% after some lockdown restrictions were eased…..

Labour market uncertainty
While unemployment continues to rise and there remains great uncertainty over the future of many furloughed jobs, last month did see some tentative early signs that the labour market may be stabilising. According to the latest ONS data, an estimated 1.74 million people were unemployed in the UK between October and December, with younger workers bearing the brunt of job losses witnessed since the start of the pandemic. The overall unemployment rate now stands at 5.1%, the highest recorded figure in almost five years….

Markets: (Data compiled by TOMD)
Major global indices closed in positive territory at the end of February, as recovery hopes gained traction. With the vaccine roll out continuing at pace and a roadmap for exiting lockdown unveiled in the UK, cyclical stocks such as airlines, banks, housebuilders and fashion retailers made strong gains toward the end of the month…..

Inflationary pressures mount
Official statistics show the UK headline rate of inflation has edged higher, with economists warning of further upward pressure during the coming months…

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