UK economy ‘showed some improvement’ in February - but remains 8% below pre-pandemic level

The UK economy rebounded slightly in February, according to the Office for National Statistics (ONS).

However, although the economy slightly recovered amid the third lockdown, the figure was still almost 8 per cent lower than before the Covid pandemic.

The ONS said gross domestic product (GDP) grew by 0.4 per cent, which shows an improvement from a decline of 2.2 per cent decline in January.

The construction sector saw an increase of 1.6 per cent for the month, as restrictions regarding work and maintenance began to ease.

Production and manufacturing activity also improved, with 1 per cent and 1.3 per cent improvements respectively.

However, the service sector reported just a 0.2 per cent growth, as hospitality and retail remained limited due to lockdown restrictions.

Exports to the EU increased by 46.6 per cent - which equates to £3.7 billion - after a record slump of £5.7 billion in January.

The export increases were driven by machinery, transport equipment and chemicals, according to the ONS, which also said that the import of goods from the EU rebounded too, increasing by 7.3 per cent - or £1.2 billion - in February.

‘The latest data confirms a modest return to growth in February’

A spokeswoman for the ONS said that although “the economy showed some improvement in February after the large falls seen at the start of the year,” it still “remains around 8 per cent below its pre-pandemic level.”

The spokeswoman added: “Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.

“Construction grew strongly after revised figures showed they had struggled in the last couple of months.

“Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels.

“However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”

However, Suren Thiru, head of economics at the British Chamber of Commerce, said “the latest data confirms a modest return to growth in February,” but that “coming after a contraction in January, it does little to alter the prospect of a downbeat first quarter for the UK economy.”

“The pick-up in output in February reflected a broad-based improvement in activity with all the main sectors recording an increase in growth,” Ms Thiru added.

“The clarity provided by February’s announcement of a road map for reopening also helped support output in the month.”

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