UK economy

The UK economy is growing slower than the expectation in May after its rebound in the hospitality sector. It was quite offset due to the disruption in the production of cars. The economy is seeing an expansion of 0.8% in May as the corona-related restrictions are easing out. It is allowing the pubs and the restaurants for serving indoors.

During the growth in the fourth consecutive month, it has slowed down from the 2% growth in April. The economy is still below the3.1% after the pre-pandemic level.

“Of course, the pace of the recovery was always going to slow as the economy climbed back towards its pre-crisis level. But we hadn’t expected it to slow so much so soon,” said Paul Dales, an economist with Capital Economics.

The pubs and restaurants are responsible for the majority of the growth in May. The hotels are also taking a recovery as the restrictions are having the lift up. The accommodation and the food services have grown massively as 37.1% in May. The overall service sectors have grown up to 0.9%.

But the UK car market is still struggling with the shortage of microchips. The manufacturer and the transport are seeing a lower rate of 16.5%. The construction firms hit with very wet weather in May. However, the market is still 0.3% up from February.

British Chambers of Commerce head of economics Suren Thiru said: “While the latest figures confirm the rebound in economic activity continued into May, the sharp slowdown in growth suggests that the recovery is losing a little steam as the temporary boost, from the earlier phases of reopening, fades.”

The UK economy output has risen to 3.6% in the three months to May. The retail sales, like pubs, schools, and restaurants, have helped. The government is continuing with its support for the recovery. There is a furlough scheme that will continue until September. The schemes like restart will help people who have lost their jobs back to back.

Emma-Lou Montgomery, associate director at Fidelity International, said a sporting summer might not give the bounce, but the impact on the confidence of the consumer must not be ignored. There are many unknowns ahead. The UK has set its road map for freedom day. But the cases are rising, and the challenges are making the market grow at a very slow pace.

Credits: BBC

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