UK economy slows although restrictions waivedEuropost
The UK economy in May slowed its Covid-19 recovery although travel and transport restrictions in the country were relaxed, official data showed. The slowdown was provoked by the shortage of raw materials for the industrial production and especially semiconductor chips for the making of vehicles, Reuters reported. UK GDP rose by 0.8% in May which is far below 2.0% in April and under previous forecasts of 1.5%.
Britain suffered one of the biggest blows from pandemic among advanced economies last year and GDP in May was 3.1% below its level in February 2020, the last full month before the country first went into lockdown. The Bank of England expects Britain's economy to grow by 7.25% this year, the fastest annual growth since 1941 when Britain was rearming during WWII. Last year output slumped by almost 10%, the biggest drop in more than 300 years. April saw the easing of restrictions for non-essential retailers, hairdressers, and pubs and restaurants that could serve customers outside. In May, hospitality firms were allowed to resume indoor service. UK's dominant services sector grew by a weaker-than-expected 0.9% in May from April as a huge 37.1% monthly jump for accommodation and food services failed to offset slower increases elsewhere in the sector. Supermarket sales fell as more people ate out, and education output dropped due to a decline in school attendance. Industrial output rose by 0.8% but manufacturing shrank narrowly. The chip shortage affecting carmakers led to the biggest fall in their output since April 2020.