Rishi Sunak hails ‘promising sign’ after GDP surged by 2.1% in March

Rishi Sunak hailed a ‘promising sign’ today as GDP grew at the fastest rate since last summer in March – and the hit from the third lockdown was smaller than feared.

Although the brutal coronavirus restrictions meant the economy shrank 1.5 per cent between January and March, the scale of the downturn was lower than the 4 per cent initially predicted.

Single month figures for March also show there was a significant surge, with 2.1 growth the fastest rate recorded since August last year. 

The Chancellor said the figures from the Office for National Statistics were a ‘promising sign’.

‘Despite a difficult start to this year, economic growth in March is a promising sign of things to come,’ he said. 

Director of Economic statistics Darren Morgan said: ‘The strong recovery seen in March, led by retail and the return of schools, was not enough to prevent the UK economy contracting over the first quarter as a whole, with the lockdown affecting much of the services sector.

‘However, construction grew strongly over the quarter, and in March, was above its pre-pandemic level. Manufacturing also recovered from an initial fall, increasing strongly in February and March, as businesses continued to adapt and make themselves COVID-19 secure.

‘Exports of goods to the EU continued to increase in March and are now almost back to their December level. However, imports from Europe remain sluggish in the first three months of the year, being outstripped by non-EU imports for the first time on record.’

The Bank of England last week forecast that first quarter GDP would fall by 1.5 per cent – far less than the 4 per cent plunge it had warned over at the start of the lockdown.

It also hiked its growth outlook for the full year to 7.25 per cent – which would be the best year of growth since the Second World War – as the UK stages a vaccine-fuelled recovery.