Britain shows emerging signs of economic recovery
LONDON (Reuters) – Britain is showing signs of economic recovery from the COVID-19 pandemic as it gradually eases its latest lockdown measures, according to a series of timely and forward-looking indicators.
The world’s fifth-largest economy shrank by almost 10% in 2020, a recession more severe than almost any of its European peers after locking in later and longer than many of them.
But helped by the rapid rollout of COVID-19 vaccinations, it is lifting its third lockdown as other countries in Europe recently tightened restrictions.
Non-essential retailers in England reopened on April 12, as well as pubs and restaurants operating outside, and from May 17 restrictions will be lifted again to include indoor hospitality, shows and sporting events .
Here are some of the early signs that easing the lockdown is helping the recovery.
Data from the online hospitality reservation service OpenTable shows an ongoing recovery following the reopening of restaurants to the field service.
Bookings were last down around 35% from their April 2019 level, about the same as in December before the latest lockdown began, according to the figures.
A recovery cannot come soon enough for the hospitality sector, one of the hardest hit by the pandemic. According to the latest official data, production in the accommodation and food sector in February was 58% below its pre-pandemic level.
GRAPHIC: UK restaurant reservations jump when lockout partially lifts: OpenTable – https://fingfx.thomsonreuters.com/gfx/polling/xegvbxqwwvq/Pasted%20image%201619005379451.png
JOB ADS RETURN TO PREPANDEMIC LEVEL
The volume of job vacancies published on the online platform Adzuna has returned to its pre-pandemic level, a potentially promising sign of a recovery in employment.
Yet conditions in the labor market remain far from normal. The number of salaried jobs was more than 800,000 below pre-pandemic levels last month, official data showed Tuesday.
Some 363,000 people are classified as long-term unemployed after being out of work for a year or more, but with a similar number in the six to 12 month bracket, that number could soon rise sharply.
GRAPHIC: Jobs in UK return to pre-pandemic level: Adzuna – https://fingfx.thomsonreuters.com/gfx/polling/rlgpdzaegpo/Pasted%20image%201619005262923.png
Most economists believe inflation will almost certainly increase later this year, although opinions differ as to whether it will prove to be transient.
According to the IHS Markit / CIPS PMI survey, reports of increasing cost pressures among UK businesses are more prevalent than at any time in the past four years. Similar movements in the past have been followed by rising consumer prices.
GRAPHIC: Inflation in UK could rise sharply, suggests PMI – https://fingfx.thomsonreuters.com/gfx/polling/xklvyyborvg/Pasted%20image%201619005598719.png
SWEEPS BOARDROOMS OPTIMISM
More and more UK corporate finance bosses are saying they are optimistic about their prospects than ever since accounting firm Deloitte began interviewing them in the mid-2000s.
However, these surveys say little about the extent of any economic recovery. It remains to be seen whether optimism translates into a surge in investment and hiring.
And with the COVID-19 pandemic waking up in other parts of the world, these early signals of economic recovery in Britain could prove fragile.
GRAPHIC: Optimism on the rise in UK boardrooms: Deloitte – https://fingfx.thomsonreuters.com/gfx/polling/bdwpkblnbvm/Pasted%20image%201619005742317.png
(Reporting by Andy Bruce; Editing by Nick Macfie)