UK economy improved in February despite lockdown measures

The UK economy rebounded slightly in February amid the third lockdown but was still almost 8% lower than before the pandemic, according to official figures.

The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.4%, representing an improvement from a 2.2% decline in January, which itself had been revised upwards from a previously predicted 2.9% fall.

Nevertheless, the February reading was slightly below the forecasts of some analysts, with experts at Investec predicting a 0.7% improvement for the month.

The construction sector saw activity jump by 1.6% for the month amid a lift in new work and maintenance.

Production and manufacturing activity also improved, with the two sectors revealing 1% and 1.3% improvements respectively.

Meanwhile, the service sector remained particularly constrained, reporting just 0.2% growth, as hospitality and retail remained constrained by pandemic restrictions.

The figures also revealed that exports to the EU increased by £3.7 billion – or 46.6% – following a record slump of £5.7 billion in January.

The ONS said the export increases were driven by machinery, transport equipment and chemicals.

It added that the import of goods from the EU also rebounded, increasing by £1.2 billion – or 7.3% – in February.

An ONS spokeswoman said: “The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level.

“Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.

“Construction grew strongly after revised figures showed they had struggled in the last couple of months.

“Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels.

“However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”

Suren Thiru, head of economics at the British Chamber of Commerce, said: “The latest data confirms a modest return to growth in February.

“However, coming after a contraction in January, it does little to alter the prospect of a downbeat first quarter for the UK economy.

“The pick-up in output in February reflected a broad-based improvement in activity with all the main sectors recording an increase in growth.

“The clarity provided by February’s announcement of a road map for reopening also helped support output in the month.”