LONDON (Reuters) – Britain is showing signs of economic recovery from the COVID-19 pandemic as it gradually relaxes its latest lockdown measures, according to a range of timely and forward-looking indicators.
The world’s fifth-biggest economy shrank by almost 10% in 2020, a more severe slump than almost all its European peers after it locked down later and for longer than many of them.
But helped by the fast rollout of COVID-19 vaccinations, it is in the process of lifting its third lockdown while other countries in Europe have recently tightened restrictions.
Non-essential retailers in England reopened on April 12 along with pubs and restaurants operating outdoors, and from May 17 restrictions will be lifted further to include indoor hospitality, performances and sporting events.
Here are some of the first signs that show the easing of lockdown is helping the recovery.
RESTAURANT BOOKINGS
Data from online hospitality booking service OpenTable show a recovery under way following the reopening of restaurants for outdoor service.
Bookings were last down around 35% compared with their level in April 2019, roughly the same as in December before the start of the latest lockdown, the figures show.
A recovery cannot come soon enough for the hospitality sector, one of the hardest hit by the pandemic. Output in the accommodation and food sector during February stood 58% below its pre-pandemic level, according to the latest official data.
GRAPHIC: UK restaurant bookings jump as lockdown lifts partially: OpenTable – https://fingfx.thomsonreuters.com/gfx/polling/xegvbxqwwvq/Pasted%20image%201619005379451.png
JOB ADVERTS RETURN TO PRE-PANDEMIC LEVEL
The volume of job adverts posted on the online Adzuna platform has returned to its pre-pandemic level, a potentially promising sign for a recovery in employment.
Still, conditions in the labour market remain far from normal. The number of payrolled jobs were more than 800,000 below pre-pandemic levels last month, according to official data published on Tuesday.
Some 363,000 people are classed as long-term unemployed after having been out of work for a year or more but with a similar number in the six-to-12-month bracket, that figure could soon rise sharply.
GRAPHIC: UK job advert listings return to pre-pandemic level: Adzuna – https://fingfx.thomsonreuters.com/gfx/polling/rlgpdzaegpo/Pasted%20image%201619005262923.png
INFLATION SET TO RISE
Most economists think inflation is almost certain to rise later this year, although views differ on whether it will prove to be transitory.
Reports of rising cost pressures among British businesses are more widespread than at any point in the past four years, according to the IHS Markit/CIPS PMI survey. Similar moves in the past have been followed by a rise in consumer prices.
GRAPHIC: UK inflation may be set to rise sharply, PMI suggests – https://fingfx.thomsonreuters.com/gfx/polling/xklvyyborvg/Pasted%20image%201619005598719.png
OPTIMISM SWEEPS BOARDROOMS
More finance bosses from British companies are saying they are upbeat about their prospects than at any time since accountancy firm Deloitte began surveying them in the mid-2000s.
However, such surveys say little about the magnitude of any economic upswing. Whether the optimism translates into a surge of investment and hiring remains to be seen.
And with the COVID-19 pandemic flaring up again in other parts of the world, these early signals of economic recovery in Britain may turn out to be fragile.
GRAPHIC: Optimism surges in UK boardrooms: Deloitte – https://fingfx.thomsonreuters.com/gfx/polling/bdwpkblnbvm/Pasted%20image%201619005742317.png
(Reporting by Andy Bruce; Editing by Nick Macfie)
