UK beats expectations as economy rallies faster

Photo: AP

Britain is emerging from the recession faster than previously thought, AP reported. Official figures confirmed that UK ended 2020 in a considerably stronger position than experts had forecast, but it had also posted a larger output drop for the first coronavirus lockdown.

In its latest revisions for 2020 data, the Office for National Statistics said that the British economy contracted by 19.5% during the second quarter, the first full quarter of lockdown. That was worse that the 19% initial estimate. However, it said, the economy rebounded by 16.9% and 1.3% in the third and fourth quarters, better than the previous estimates of 16.1% and 1%.

Overall, the agency said, the British economy ended 2020 9.8% smaller, slightly better than the previous estimate of 9.9%. Despite the modest revision, the contraction last year was the deepest in over 300 years. The British economy has suffered one of the deepest Covid-19 recessions among leading developed nations, with many blaming the Conservative government’s repeated failures to back lockdown restrictions sooner, including the latest one, which came into force in early January. The U.K. as a whole has had Europe’s deadliest Covid-19 outbreak, with over 126,000 people having died after testing positive for the virus.

Still, the combination of falling coronavirus infections - new cases are running at around 5,000 a day against a peak of nearly 70,000 a day in early January - and the rapid rollout of vaccines has spurred hopes about a pick-up in economic activity in the spring as lockdown restrictions are lifted.

By mid-April, the British government hopes that retailers in England selling nonessential items, such as footwear and books, will be able to reopen. Pubs are also set to reopen outdoors from that date, with indoor serving following on 17 May.

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