Summer boom is coming as Brits gear up to spend lockdown savings

BRITAIN looks on track for a summer boom as the economy opens up leading to a splurge of savings made in lockdown.

Pubs and restaurants in particular should benefit, while the construction and manufacturing sectors are also sharply improving.

Official figures today show the economy shrank by 1.5% in the first quarter – less than expected – but that GDP was up 2.1% in the month of March.

Dean Turner at UBS Global Wealth Management, said: “There is reason for optimism as today’s figures confirm that the UK economy has weathered the first-quarter restrictions much better than initially feared.

“Moreover, the bounce in activity seen in March, which was the strongest monthly GDP since August 2020, provides an encouraging backdrop for the second quarter.”

Tej Parikh, chief economist at the Institute of Directors, said: "The UK economy is on course for a bumper bounce back this year.”

Education was a big driver in the much better than expected March figure, thanks to the return of schools.

Pubs and restaurants have already anecdotally noted huge demand. The government estimates that Britons have an extra £180 billion in their bank accounts since Covid began. That is equal to about 10% of GDP. Economists are split on how much of that will be spent.

Parikh added: “The first quarter should mark the low point for the economy in 2021. The lockdown and added costs of navigating new trading terms with the EU limited many businesses’ trading activities at the start of the year. Meanwhile, the vaccine rollout, extension of support measures at the Budget, and the roadmap to reopen the economy has helped build directors’ confidence for the months ahead.”

The figures are good news for chancellor Rishi Sunak.

Suren Thiru at the British Chambers of Commerce (BCC), said:  “While the UK economy contracted in the first quarter, the downbeat headline figure masks a renewed momentum through the quarter from January’s drop in output to an exceptionally strong March outturn as lockdown measures started to ease.