The UK economy shrank by 1.5% in the first quarter of 2021 as the country underwent a COVID-19 lockdown, according to the Office for National Statistics (ONS).
School closures and a large fall in retail sales earlier in the quarter dragged down economic growth, said the ONS. The economy is now 8.7% smaller than before the pandemic.
However, the ONS revealed that there was a strong recovery in March, with the economy growing 2.1% as a result of increased retail spending and the return of schools.
Commenting on the figures, Alpesh Paleja, Lead Economist at the Confederation of British Industry (CBI), said: ‘While latest data confirms the economy was hit once again by a renewed lockdown at the turn of the year, the fall in activity was much smaller compared with Spring 2020. Households and businesses have clearly adapted better to working and living under COVID restrictions, despite the brutal cost of doing so.
‘A range of indicators, including CBI business surveys, point to a rebound in activity heading into summer – with the economy opening up and pent-up demand waiting to be unleashed. But this is a recovery that will be felt more by some. Undoubtedly, hardest-hit sectors and households have a longer road ahead.’