The UK economy is doing even worse than we thought, and the prospects of a V-shaped recovery look bleak
- The UK's
economygrew by only 1.8% in May, falling well below economists' predictions.
- Reuters economists were expecting a 5.5% increase, after 20.3% contraction in the
UK economyin April.
- The small scale of the recovery suggests that the much-vaunted V-shaped recovery some economists expect in the UK is a long way away.
- "The economy was still a quarter smaller in May than in February, before the full effects of the pandemic struck," ONS statistician Jonathan Athow said.
The UK's economy grew by a much smaller amount than expected in May after a historic plunge in
The Office for National Statistics said on Tuesday that the UK economy grew by 1.8% in May, after a dramatic 20.3% contraction in April.
Economists polled by Reuters were betting on a 5.5% rebound.
So while May's GDP figures are a step in the right direction, they reinforce the view that the path to economic recovery from the impacts of the
The ONS also said the UK economy shrank 19.1% in the three months to May, and contracted by 24.1% year-on-year.
A chart of the rebound published by the ONS on Tuesday shows the tiny scale of the recovery compared to previous drops, and suggests that the UK is a long way away from the much-vaunted V-shaped recovery some economists expect in major Western economies:
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "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."
The ONS said the UK economy has contracted by 24.5% since February, before the pandemic kicked off.
Athow added: "In the important services sector, we saw some pickup 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."
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