Sunak hails ‘promising sign’ as April reopening sees fastest GDP growth since last summer
Britain’s economy grew by 2.3% in April as the high street and hospitality sector reopened, official figures show.
That meant that GDP was a record 27.6% larger compared with the same month last year when the nation was in the grip of the first coronavirus lockdown.
Chancellor Rishi Sunak hailed it as a “promising sign that our economy is beginning to recover”.
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The chancellor acknowledged that workers continued to need support
The data from the Office for National Statistics (ONS) covers a period when non-essential retail as well as outdoor drinking and dining were allowed to resume – on 12 April.
It followed a subdued start to the year when latest lockdown measures had sent the economy into reverse gear.
The ONS said that April’s monthly growth was the fastest since July last year, when businesses were reopening after the initial period of coronavirus restrictions.
But it still left gross domestic product (GDP) 3.7% below its pre-pandemic peak of February 2020.
Jonathan Athow, ONS deputy national statistician for economic statistics, said GDP was boosted by strong growth in retail spending as well as schools – which had returned in March – being open for the full month, and the start of the reopening of the hospitality sector.
There was also an increase in car and caravan sales as well as negative one-off factors such as car plant shutdowns and oil field maintenance.
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Meanwhile, trade friction following the end of the Brexit transition period continued to have an impact.
“Exports of goods have now, broadly, recovered from the disruptions seen at the beginning of the year,” Mr Athow said.
“However, imports of goods from the EU are still significantly down on 2020 levels.”
Monthly imports from non-EU countries were the highest since records began in January 1997, the ONS said.
The chancellor said: “Today’s figures are a promising sign that our economy is beginning to recover.”
But he added that, while a million people had come off furlough across March and April, many workers still required continued support.
The COVID-19 pandemic resulted in GDP shrinking by nearly 10% in 2020, the biggest collapse in 300 years.
Forecasters predict that as Britain emerges from the crisis it will see a consumer-led bounce back with the fastest pace of growth since the Second World War.
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But there are fears that a delay to the 21 June date for the end of lockdown measures could hold back the recovery.
UK GDP shrank by 1.5% in the first quarter though on a monthly basis the economy has been recovering ever since a 2.5% contraction in January, posting growth of 0.7% in February and 2.1% in March.
April’s growth figure was broadly in line with economists’ expectations.
Thomas Pugh, UK economist at Capital Economics, said: “The jump in GDP in April was another sign that consumers are raring to spend as the economy reopens.
“GDP is on track to return to its February level before the end of the year.
“If anything, the economy could regain its pre-crisis level even sooner.”
Thousands of job cuts at the NHS will go ahead after the £1bn needed to fund the redundancies was approved by the Treasury.
The government had already announced its intention to slash the headcount across both NHS England and the Department of Health by around 18,000 administrative staff and managers, including on local health boards.
The move is designed to remove “unnecessary bureaucracy” and raise £1bn a year by the end of the parliament to improve services for patients by freeing up more cash for operations.
NHS England, the Department of Health and Social Care, and the Treasury had been in talks over how to pay for the £1bn one-off bill for redundancies.
It is understood the Treasury has not granted additional funding for the departures over and above the NHS’s current cash settlement, but the NHS will be permitted to overspend its budget this year to pay for redundancies, recouping the costs further down the line.
‘Every penny will be spent wisely’
Chancellor Rachel Reeves is set to make further announcements regarding the health service in the budget on 26 November.
And addressing the NHS providers’ annual conference in Manchester today, Mr Streeting is expected to say the government will be “protecting investment in the NHS”.
He will add: “I want to reassure taxpayers that every penny they are being asked to pay will be spent wisely.
“Our investment to offer more services at evenings and weekends, arm staff with modern technology, and improving staff retention is working.
“At the same time, cuts to wasteful spending on things like recruitment agencies saw productivity grow by 2.4% in the most recent figures – we are getting better bang for our buck.”
Health Secretary Wes Streeting during a visit to the NHS National Operations Centre in London earlier this year. Pic: PA
Mr Streeting’s speech is due to be given just hours after he became entrenched in rumours of a possible coup attempt against Sir Keir Starmer, whose poll ratings have plummeted ahead of what’s set to be a tough budget.
Mr Streeting’s spokesperson was forced to deny he was doing anything other than concentrating on the health service.
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He is also expected on Wednesday to give NHS leaders the go-ahead for a 50% cut to headcounts in Integrated Care Boards, which plan health services for specific regions.
They have been tasked with transforming the NHS into a neighbourhood health service – as set down in the government’s long-term plans for the NHS.
Those include abolishing NHS England, which will be brought back into the health department within two years.
Watch Wes Streeting on Mornings With Ridge And Frost from 7am on Sky News.
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