UK economy grows in April and May as shops reopen

The UK economy grew 2.3% in April, its fastest monthly growth since July last year.

Shoppers spent more on the High Street as non-essential shops reopened, and people bought more cars and caravans.

There was also more spending in pubs, cafes and restaurants as restrictions eased the Office for National Statistics (ONS) said.

Despite the surge in activity, the UK economy is still 3.7% below its pre-pandemic peak.

Construction fell in April, compared to strong growth the previous month, but the sector remains above its pre-pandemic peak.

Chancellor Rishi Sunak said that the figures were “a promising sign that our economy is beginning to recover”.

Mr Sunak said more than one million people had come off the government’s furlough scheme in March and April as businesses reopened.

Jonathan Athow, ONS deputy national statistician for economic statistics said: “Strong growth in retail spending, increased car and caravan purchases, schools being open for the full month, and the beginning of the reopening of hospitality all boosted the economy in April.”

Yael Selfin, chief economist at KPMG UK, said shoppers flocked back to the High Street as households spent some of their savings on non-essential goods.

Spending in non-essential shops drove much of the growth as customers were allowed back into stores from 12 April in England, with clothes stores seeing a boost of 69.4%.

Overall growth in the services sector was 3.4%, although it remains 4.1% below pre-pandemic levels of February 2020.

This included restaurants, bars and cafes, where customers could eat and drink outdoors again, seeing a 39% rise in growth.

People also used the ability to travel across the country again, with activity at caravan parks and holiday lets growing 68.6%, while hairdressers and other personal services grew 63.5%.

A further relaxation of lockdown rules is planned for 21 June, which would let pubs, bars and restaurants increase the number of people allowed indoors.

But that is now looking increasingly unlikely which may put downward pressure on growth in the summer.

Regardless of any pause in reopening, Ms. Selfin said economic activity levels in May and June would not rise at the same rate as the April rebound.

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