By Jeph Ajobaju, Chief Copy Editor
There were more than 657,000 job vacancies in the United Kingdom between February April, up about 48,400 on the previous quarter.
Job vacancies hit their highest level since the start of the pandemic with the easing of lockdown leading employers to start recruiting, according to data collated by the Office of National Statistics (ONS).
However, gross domestic product (GDP) dipped 1.5 per cent in the first quarter of 2021 (Q1 2021), a better than expected performance helped by a surge in activity in March as coronavirus restrictions were eased slightly.
The lifting of the remaining restrictions is expected to unlock a huge boost in growth this summer, CNN writes.
But the broadcaster notes that multiple lockdowns and a trade shock caused by Brexit have left UK GDP 8.7 per cent smaller than it was pre-pandemic, meaning the country has a bigger mountain to climb than many other major economies.
Economic output in Italy, another country hit hard by the pandemic, is 6.9 per cent lower than before the pandemic.
The German and French economies are 4.9 per cent and 4.4 per cent smaller, respectively, while the United States is nearly back to pre-pandemic levels.
The question now is how quickly the UK economy bounces back as its hugely successful vaccination program continues and coronavirus restrictions are relaxed further.
“The burst of growth in March shows that the recovery has been gathering momentum more quickly than we had thought,” Ruth Gregory, senior UK economist at Capital Economics told CNN.
The economy may return to its February 2020 level even before the end of the year, she added.
Economists at ING said the strength of the recovery depends on how quickly consumers spend savings they’ve accumulated during the pandemic and whether the government continues to offer tax breaks to business.
Brexit continues to hurt
Exports to the European Union (EU) continued to recover in March, nearly reaching the level that immediately preceded a historic collapse after Britain completed its exit from the bloc on January 1.
However, there is evidence that new border controls continue to affect trade. Imports from Europe remained sluggish in Q1 2021, the ONS said, and were outstripped by non-EU imports for the first time on record.
“There’s still a small chunk of firms still struggling with the changes,” said James Smith, an economist at ING.
“The bottom line is that there will continue to be a slow-burning impact of new trade frictions on the UK economy, even if the immediate teething problems have passed.”
IMF predicts 5.3% GDP growth in 2021
CNBC adds that economists polled by Reuters had expected UK GDP to shrink 1.7 per cent, with stringent restrictions having been in place throughout Q1 2021 as the country tried to contain spiraling Covid-19 cases.
However, with lockdown measures now being phased out and the economy reopening, the country is expected to see a sharp rebound for the remainder of the year.
The International Monetary Fund (IMF) expects UK GDP to grow 5.3 per cent in 2021, partially recovering from last year when the economy saw its largest annual contraction since the Great Frost of 1709.
Coronavirus was eased further on May 17, with international travel permitted in most circumstances and hospitality venues allowed to welcome customers indoors, a lifeline for the UK’s dominant services industry.
The economy grew 2.1 per cent month-on-month in March, slightly exceeding expectations, and the level of GDP now sits 8.7 per cent below its pre-pandemic level at the end of 2019, according to the ONS.
On a year-on-year basis, GDP shrank 6.1 per cent in the first quarter.
Both services and production output contracted over the first quarter, but construction output grew.
