UK’s GDP shrinks by 1.6% (Q1, 2021)

The UK’s gross domestic product 9GDP) shrank by 1.6 percent on quarter in January to March 2021, revised from the first estimate of a 1.5 percent fall and ending a two-quarter period of growth.

There were declines in both household consumption (-4.6 percent vs -1.7 percent in Q4 2020) and business investment (-10.7 percent vs 5.9 percent) as a result of the reintroduction of COVID-19 restrictions, while government expenditure increased at a slower pace (1.5 percent vs 6.7 percent) and the trade balance improved as imports fell more than exports.

In output terms, the largest contributors to the contraction were from the education, wholesale and retail trade, and accommodation and food services industries.

The level of GDP in the UK was 8.8 percent below pre-pandemic levels at the end of 2019.

Compared with the same quarter a year ago, the UK economy fell by an unrevised 6.1 percent.

Source: Trading Economics