3 Minutes to Read by 3 Minutes to Read by 3 Minutes to Read by 3 (Reuters) – LONDON (Reuters) – According to official figures, Britain’s post-lockdown economic recovery slowed considerably in May, highlighting the impact of a global scarcity of microchips on the country’s automakers. The City of London financial area may be seen as people walk along the south side of the River Thames in London, Britain, on March 19, 2021, during the coronavirus illness (COVID-19) outbreak. REUTERS/File/Henry Nicholls Photo The Office for National Statistics said that gross domestic product increased by 0.8 percent in April, far less than the consensus prediction of 1.5 percent in a Reuters poll of experts. The Office for National Statistics lowered its April growth estimate to 2.0 percent from 2.3 percent previously, owing to a lower contribution from COVID testing services, albeit the estimate for March was raised. “Of course, once the economy recovered to pre-crisis levels, the rate of recovery was always going to be gradual. But we weren’t expecting it to slow down so quickly “According to Capital Economics economist Paul Dales. Following the publication of the results, the value of the pound decreased somewhat. The Bank of England anticipates Britain’s economy to grow by 7.25 percent this year, the greatest annual growth rate since 1941, when the country was rearmaing for WWII. Last year, output fell by about 10%, the steepest reduction in more than 300 years. Non-essential businesses, hairdressers, taverns and restaurants that may serve clients outside had their limitations eased in April. Hospitality businesses were authorized to resume indoor service in May.” The dramatic deceleration in growth shows that the economy is losing pace as the initial lift from reopening fades “According to Suren Thiru, the British Chamber of Commerce’s head of economics. Despite the dip in May, the 0.8 percent growth rate was higher than pre-pandemic month-on-month GDP increases. The UK’s main services sector rose by 0.9 percent in April, with lodging and food services seeing a massive 37.1 percent monthly increase. Industrial output increased by 0.8 percent, while building output decreased by 0.8 percent in May, the wettest month since 1862. According to the ONS, the chip shortage affecting automakers has resulted in the greatest drop in output since April 2020. Between February and May, the British economy expanded each month, but GDP was still 3.1 percent lower at the end of May than it was in February 2020, before the pandemic started. GDP was roughly 25% higher in May this year than in May last year, when the UK was dealing with its first coronavirus lockdown, according to the ONS. After a rapid rollout of COVID-19 vaccinations, Prime Minister Boris Johnson aims to release most of the last limitations imposed by a third lockdown on July 19. Although new instances of the Delta version of the coronavirus have increased in recent weeks, private-sector data and polls from that time period show no significant impact on hiring or consumer behavior. The ONS stated that the release of trade figures, which were supposed to be provided along with the GDP data, had been postponed until 1100 GMT. William Schomberg and David Milliken contributed reporting./n
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