UK economy latest

This page provides commentary and charts on the latest changes in the UK economy, using novel and rapid data sources as well as official statistics.

We explain the reasons behind each change as much as possible, although it can be difficult to separate the impacts of different things such as Brexit and COVID-19.

For an overview of our main economic indicators, visit our dashboard.

This page was last updated at 07:00 on 13 April 2021.

The economy grew by 0.4% in February 2021

13 April 2021

Real gross domestic product (GDP) is estimated to have grown by 0.4% in February 2021 following a revised fall of 2.2% in January 2021.

Restrictions were in place to varying degrees across all four nations of the UK throughout January and February. Restriction announcements for each nation are available:

• England

• Scotland

• Wales

• Northern Ireland

The output approach to GDP shows that February’s level is 7.8% below levels before the effects of the coronavirus (COVID-19) pandemic were seen (February 2020), and 3.1% below the initial recovery peak (October 2020). Overall, all main sectors of GDP remain below their pre-pandemic levels, but only services remains notably lower than the initial recovery peak in October 2020.

Output growth in the services sector was broadly flat in February 2021 (grew by just 0.2%) as coronavirus restrictions remained largely unchanged; this follows negative 2.5% growth in January 2021.

Overall, in February 2021, consumer-facing services were 18.6% below pre-pandemic levels (February 2020), while all other services were 7% below pre-pandemic levels.

The production sector grew in February 2021, by 1.0%. This was mainly because of manufacturing output picking up for the first time since November 2020, as the manufacture of motor vehicles, trailers and semi-trailers grew following contraction in the previous two months.

The construction sector saw growth of 1.6% in February 2021, driven by both new work and repair and maintenance.

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Exports of goods to the EU showed some recovery in February 2021

13 April 2021

Total exports of goods, excluding non-monetary gold and other precious metals, increased by 9.9% in February 2021, partially recovering from the substantial January falls. This increase was driven by a 46.6% increase in exports to the EU, while exports to non-EU countries fell by 10.5%. Total imports of goods increased by 8.8% in February 2021, with a 7.3% and 10.2% increase in imports from EU countries and non-EU countries respectively.

Goods imports and exports to the EU increased in February 2021

EU and non-EU goods imports and exports, excluding non-monetary gold and other precious metals, with EU and non-EU countries, February 2019 to February 2021

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Total imports of chemicals increased by 19.5% in February 2021. Where the UK would commonly import more from EU countries in such commodities, in February 2021, increased imports of chemicals were driven by non-EU countries. November and December of 2020 saw stockpiling of goods, particularly chemicals, from the EU in preparation for the end of the transition period, and businesses may still be using up these stocks before importing more.

Increased exports of goods were largely seen in machinery and transport equipment, and chemicals, to the EU. The 41.8% increase in exports of machinery and transport equipment to the EU was driven by a rise in exports of cars. Demand for UK vehicles remains high in the EU, which is still the UK’s largest car buyer despite the ongoing coronavirus (COVID-19) pandemic challenges.

The total trade deficit for February 2021, excluding non-monetary gold and other precious metals, widened by £0.5 billion to £1.4 billion, with imports increasing by £2.9 billion and exports increasing by £2.3 billion.

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Retail footfall in the UK and traffic in London increased as coronavirus restrictions ease

8 April 2021

Average daily traffic camera activity in London increased in the week ending 4 April 2021 compared with average levels seen in the two weeks immediately prior to the March 2020 lockdown. Motorbikes increased to 123%, pedestrians and cyclists increased to 109%, and cars increased to 103%. This rise coincides with the easing of restrictions in England.

In the week to 3 April 2021, UK retail footfall increased by 9% compared with the previous week to 51% of the level seen in the same week in 2019, with footfall at retail parks fairing much stronger than at shopping centres and high streets.

Meanwhile, in the week to 1 April 2021, the aggregate Clearing House Automated Payment System (CHAPS)-based indicator of debit and credit card purchases increased by 10 percentage points compared with the previous week to 88% of its February 2020 average. However, this increase was partly driven by the usual increase in “staples” (essential goods such as food and utilities) seen around the turn of the month, as well as a continued increase since early 2021 in the value of CHAPS payments received by large UK corporates from their credit and debit card processors.

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The proportion of businesses currently trading and the workforce on furlough leave have remained stable in late March 2021

8 April 2021

The percentage of UK businesses that were currently trading between 22 March and 4 April 2021 has remained broadly unchanged at 75%.

There has been a slight increase since the start of the year, with 71% of businesses reporting that they were trading in early January 2021. The percentage for the end of March 2021 is similar to the level seen in early July 2020 but still lower than mid-December 2020, when 84% of businesses were trading. This is because of continuing coronavirus (COVID-19) restrictions.

Across all UK industries in Wave 27 (22 March to 4 April 2021) of the Business Insights and Conditions Survey:

• 73% of businesses had been trading for more than the last two weeks, broadly unchanged from Wave 26 (8 to 21 March 2021)
• 2% of businesses had started trading within the last two weeks after a pause in trading, broadly unchanged from Wave 26
• 5% of businesses had paused trading but intend to restart in the next two weeks, broadly unchanged from Wave 26
• 18% of businesses had paused trading and do not intend to restart in the next two weeks, broadly unchanged from Wave 26
• 3% of businesses had permanently ceased trading, broadly unchanged from Wave 26

The continuing coronavirus restrictions in place since the start of 2021 mean the proportion of the workforce on furlough leave has remained stable throughout January to March 2021, and is 19% at the end of March. These levels are comparable with those seen in early July 2020.

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The economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly later in 2020

31 March 2021

Revised figures show the economy, measured by gross domestic product (GDP), shrank by 19.5% in Quarter 2 (April to June) 2020, 0.5 percentage points more than first estimated (19.0%).

In Quarter 3 (July to September) 2020, GDP increased by 16.9%, an upward revision of 0.8 percentage points on the first estimate (16.1%).

This means that both the decline and the recovery in economic growth were steeper than first estimated, although the fall in GDP in 2020 remains the largest annual fall on record. Over 2020 as a whole, GDP declined by 9.8%, slightly revised from the first estimate of 9.9%. Historical figures from the Bank of England point to this being the largest annual contraction since 1709.

In Quarter 4 (October to December) 2020, household consumption fell by a revised 1.7% compared to the previous quarter, and 9.2% compared to the same quarter in 2019. This is in contrast to increases in government expenditure, investment, exports and imports, and is largely the result of lower spending in restaurants, hotels, retail and transport as a result of coronavirus (COVID-19) restrictions.

Revised estimates have also indicated that UK businesses were engaging in stockpiling of goods in Quarter 4 2020. An increase of £1.5 billion in inventories, mostly in finished manufactured goods, along with a revised 14.3% increase in imports, mostly of machinery, transport equipment, pharmaceutical and medicinal products, show evidence of stockpiling in preparation for the end of the EU exit transition period.

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Retail sales increase slightly in February 2021, following sharp decline

26 March 2021

In February 2021, the amount spent on retail was 2.2% higher, and the quantity bought was up 2.1% when compared with January 2021.

However, this signalled only modest growth in the sector following the large fall in January (8.2%) reflecting the continuation of coronavirus (COVID-19) restrictions.

Both the amount spent and quantity bought were still below levels seen in February 2020, before any restrictions were in place to curb the spread of coronavirus.

Total online sales increased 4.6% when compared with January 2021.

The proportion spent online increased to 36.1% in February, the highest on record; this compares with 35.2% in January 2021 and 20.0% reported in February 2020.

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