The UK economy returned to growth in February but by less than expected, boosted by the construction industry and a strong housing market even as coronavirus restrictions kept the economy in check.
Output grew 0.4 per cent in February compared with the previous month, data from the Office for National Statistics showed on Tuesday, with the construction industry picking up by 1.6 per cent as it was supported by a strong housing market.
That was below the 0.6 per cent increase forecast by economists polled by Reuters, and followed a fall of 2.2 per cent in January.
The services sector rose 0.2 per cent in February, as wholesale and retail trade sales picked up a little. However, overall, activity at consumer-facing businesses remains well below pre-pandemic levels.
Manufacturing rebounded 1.3 per cent from January’s contraction.
The economy swung to growth in February even as many businesses were closed, supporting the view that the UK had suffered a milder hit in the latest lockdown than it did last spring.
Output was still 7.8 per cent below the level in February last year, before the first lockdown. However, thanks to success in rolling out vaccines and with more client-facing services reopened on Monday, the economy is set for a rapid rebound in the spring.
“We’re looking for a 4-5 per cent bounce in GDP in the second quarter,” said James Smith, economist at ING.
The UK is one of the few countries that produce monthly GDP data.