UK GDP grew more than expected, industrial production unexpectedly declined

According to the report from Office for National Statistics, UK gross domestic product (GDP) is estimated to have grown by 2.3% in April 2021, the fastest monthly growth since July 2020, as government restrictions affecting economic activity continued to ease. Economists had expected a 2.2% increase.

The service sector grew by 3.4% in April 2021, with consumer-facing services re-opening in line with the easing of coronavirus restrictions and more pupils returning to onsite lessons.

Output in the production sector fell by 1.3% in April 2021, the first fall since January 2021 as three of the four sectors contracted. Economists had expected a 1.2% increase.

Within production, mining and quarrying output contracted sharply, by 15.0%, in April 2021 because of planned temporary closures for maintenance of oil field production sites.

The construction sector contracted by 2.0% in April 2021 following a strong March, with new work slowing down faster than repair and maintenance.

April’s GDP remains 3.7% below the pre-pandemic levels seen in February 2020, however it is now 1.2% above its initial recovery peak in October 2020.