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Rise in UK's GDP, exports for February

By EARLE GALE in London | China Daily Global | Updated: 2021-04-14 09:05

People shop in the Selfridges department store on Oxford street, as the coronavirus disease (COVID-19) restrictions ease, in London, Britain on April 12, 2021. [Photo/Agencies]

Activity expected to pick up rapidly in second quarter, trade with EU to grow

The United Kingdom's economy, which is widely expected to rapidly improve in the wake of Monday's relaxation of the nation's lockdown, was already strengthening during February, according to new figures.

The data, released on Tuesday by the Office for National Statistics, shows both the UK's gross domestic product and its exports to the European Union grew during the month.

The independent government department, which is also known as the ONS and which collects information on the UK's economy for the nation's lawmakers, said the rebound in exports to the EU was partly down to exporters becoming more comfortable with post-Brexit trading arrangements.

It said trade had suffered during January, both because of the new trading rules and because of government restrictions aimed at curbing the spread of the novel coronavirus.

The ONS said the value of exports to the bloc grew by 3.7 billion pounds ($5.1 billion); a rebound that followed a 5.7-billion-pound fall during January.

Imports from the bloc increased by 1.2 billion pounds following a post-Brexit nosedive of 6.7 billion pounds during January, the ONS added.

The UK's gross domestic product, or GDP, grew during February, by 0.4 percent from January, when it shrunk by 2.2 percent.

The Reuters news agency noted that the 0.4 percent increase in GDP, while welcome, was not as good as the 0.6 percent economists had hoped for.

But Thomas Pugh, an economist at Capital Economics, told the Financial Times: "Given there was no change in the lockdown restrictions in February, GDP was never going to shoot back up."

The paper noted that, despite the improvement, GDP was still 7.8 percent below where it was in February 2020.

James Smith, an economist at ING, told the Financial Times he expects things now to rapidly improve as the UK's lockdown eases.

"We're looking for a 4 to 5 percent bounce in GDP in the second quarter," he said.

The BBC noted that, while GDP and trade with the EU had improved, they were still far below the levels of a year earlier.

An ONS spokesman told the broadcaster: "The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8 percent below its pre-pandemic level."

The broadcaster said growth in exports to the EU during February amounted to a 46.6 percent jump following January's 42 percent slump.

The BBC's global trade correspondent, Dharshini David, said that, while the improvement shows the UK is edging toward the government's vision of "Global Britain's new trading era", the nation is still far from "business as usual".

She said many companies avoided sending goods into the EU during January because of fears about post-Brexit disruptions and sent them during February instead, potentially inflating the figures.

Sarah Hewin, from Standard Chartered Bank, however, said on Radio 4's Today program that, overall, the economy should now steadily improve.

"Confidence does seem to be picking up as vaccinations are spreading," she said. "We know households have built up their savings in many cases during lockdown. As lockdown restrictions are eased, people are going to be able to go out and spend those savings and that will be a big boost to the economy."

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