UK economy grew by 2.3% in April as Covid-19 restrictions eased – business live | Business

UK April GDP will be dominated by the reopening of those parts of the economy in April that had been closed (hospitality, non-essential retail, leisure) since January.

High-frequency data suggests that activity picked up swiftly in response. Retail sales jumped 9.2% m/m in April. Card (CHAPS) spending data, which captures broader categories of spending, showed aggregate credit and debit card purchases rising to their February 2020 level by the end of the month, from 80% of that level on average in March, driven mainly by ‘delayable’ spending (e.g. clothing and footwear, vehicles, household goods etc.) and, albeit to a much lesser extent, by ‘social’ spending (e.g. in restaurants and hotels).

The reopening of schools contributed 0.5ppts to monthly GDP in March, in addition there was a larger than usual 0.4ppt contribution from construction.

For April, it will be the reopening of retail and hospitality sectors that will dominate and as a result, we expect the monthly pace of GDP growth to accelerate to 2.6% m/m.


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