span>Wednesday/span>12th May 2021 - 08:22 (BST)
Initial estimates released by the Office for National Statistics (ONS) have indicated the UK economy contracted at a slower pace than anticipated over the first quarter of 2021- down 1.5% versus a -1.6% consensus. Monthly output also outperformed expectations - increasing by 2.1% in March but remains 8.7% below its pre-crisis peak.
The main drag over the early part of the year were household consumption and business investment, both as a direct result of coronavirus restrictions. School closures and a large fall in retail sales over January / February also had an impact on the reading.
Elsewhere, government expenditure increased during March, and the UK’s trade balance was improved following imports falling more sharply than exports. Construction and factory output also rose for the first time in over a year, helped along by easing restrictions and an uptick in demand.
GBP continued its rally higher from earlier in the week following the upbeat data and looks set to test key levels of resistance ahead of US inflation numbers over the coming days.
