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Economy

GDP shrinks 1.6% in Q1

The Office for National Statistics (ONS) revealed that GDP is now 8.8% below the final pre-pandemic quarter of October to December 2019

The UK’s quarterly gross domestic product (GDP) fell an estimated 1.6% in Q1 2021, a larger margin than the previously expected decline of 1.5%.

The Office for National Statistics (ONS) revealed that GDP is now 8.8% below the final pre-pandemic quarter of October to December 2019.

Moreover, compared with the same January to March quarter a year ago, the UK economy shrank by an unrevised 6.1%.

The largest contributors to the contraction were the education, wholesale and retail, and accommodation and food services industries.

Output in these sectors combined fell by 7.5% in Q1 2021, with the wholesale and retail trade industry output dropping 5.7% and the accommodation and food services sector declining 18.6%.

Production also slowed by a “slightly revised” 0.5% during the period, as manufacturing output declined 1% to leave the level of production output 3.7% lower than pre-pandemic levels.

Finally, household consumption fell by 4.6% throughout the quarter, with spending in restaurants and hotels plummeting 42.2% to contribute to household consumption being 13.4% behind pre-pandemic levels.

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