UK GDP fell more than expected in the first quarter.

According to the report from Office for National Statistics, UK gross domestic product (GDP) is estimated to have decreased by 1.6% in Quarter 1 (Jan to Mar) 2020, revised from the first estimate of a 1.5% decline. Economists had expected a 1.5% decrease. The level of GDP is now 8.8% below where it was pre-pandemic at Quarter 4 (Oct to Dec) 2019, revised from a first estimate of 8.7% below.

There have been contractions in services and production output, however construction output grew over the quarter.

In output terms, the largest contributors to this fall were from the education, wholesale and retail trade, and accommodation and food services industries, in particular at the beginning of the quarter in response to the tightening of coronavirus (COVID-19) restrictions.

Government consumption increased in Quarter 1 2021, however household consumption expenditure and gross capital formation fell as a result of the reintroduction of COVID-19 restrictions; trade contracted further with falls both in imports and exports of goods and services.

The household saving ratio increased to 19.9% in Quarter 1 2021, which is the second highest on record, compared with 16.1% in Quarter 4 2020.