Maybe not a V-shaped economic recovery we wanted
Where is the much-heralded V-shaped economy recovery?
The latest official figures show the UK economy shrank by 19.1% in the three months to May.
According to the Office for National Statistics (ONS), the economy grew by 1.8% last month, but fell by 20.4% in April and 6.9% in March.
Economists expected to see GDP growth of 5% or more in May.
There were signs of recovery in the manufacturing and house building sectors, when some businesses brought staff back to work. Both sectors reported growth of more than 8% in May.
However, the economy remains “in the doldrum”, according to the ONS.
Jonathan Athow, deputy national statistician for economic statistics at the ONS, said:
The economy was still a quarter smaller in May than in February, before the full effects of the pandemic struck.
In the important services sector, we saw some pick-up 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.
Economists are now waiting patiently for the next set of data, to be released next month, which could show a better picture as it will reflect more parts of the British economy opening.
Commenting on the latest official figures, TUC General Secretary Frances O’Grady said:
Closing down large parts of the economy was always going to lead to a sharp fall in GDP. With only a slight gain into May, the danger is that the pandemic could lead to an economic crisis.
Mass unemployment is the biggest threat facing the UK – as the thousands of job losses at British Airways and Airbus show. But the government’s announcements last week fell far short of what we need to stem the tide of redundancies.
The chancellor should have announced targeted support for the hardest-hit sectors like retail, manufacturing and aviation. And struggling businesses need more than a one-off job retention bonus to survive in the long run.
The more people we have in decent work, the faster we can move out of recession. We must create jobs by investing in new homes, childcare, faster broadband, better transport and green tech. And we need to fill the 200,000 vacancies in the NHS and social care.