U.K. Economy Grew Less Than Expected as Manufacturing Weakened
The U.K. economy grew less than expected as the relaxation of lockdown curbs extended to restaurants, hotels and cinemas.The 0.8% expansion in May followed growth of 2% the month before, which was revised down, the Office for National Statistics said Friday. It reflected small declines in construction and manufacturing output, both of which were expected to continue rapid expansion.
Gross domestic product is now 3.1% below where it was in February 2020, before the pandemic struck. The Bank of England predicts a full return by the end of the year. The boom is creating price pressures and fueling speculation about when the central bank could rein in its stimulus program.
However, risks to the outlook abound. Job support programs are being wound down, and Prime Minister Boris Johnson plans to lift all remaining restrictions on July 19, despite the delta variant of coronavirus driving a fresh wave of infections. The worry is that doing so when millions of people are not fully immunized could backfire and force the government to re-impose restrictions.
Trade statistics that were due to be published alongside GDP were delayed until later Friday due to technical issues, the ONS said.