NIESR said UK’s GDP is likely to have contracted by -1.5% qoq in Q1, with 1.8% mom growth in March. April is forecast to see GDP growth of 2.2% mom, driven by partial re-opening of pubs and restaurants. Assuming continuation of vaccination and re-opening, first estimate of Q2 GDP growth is 4.6% qoq, driven by pent-up demand and a return towards pre-Covid levels in the hospitality and retail sectors.
Rory Macqueen Principal Economist – Macroeconomic Modelling and Forecasting: “Despite little change in restrictions, a return to growth in February and upward revisions to January GDP mean that the contraction in the first quarter will be much smaller than anticipated….
“if the vaccine programme and lifting of restrictions continue on schedule this provides a firm basis for continuing growth in the second quarter and 2021 overall. The third wave in Europe and the success of other countries in vaccinating their populations will also have relevance for the recovery of the UK, as an open economy.”
