“The 0.8 per cent increase in GDP in May was slightly disappointing and means that the UK economy was still 3.1 per cent smaller than the pre-Covid level seen in February 2020, despite a bounce in the hospitality and leisure sectors as more restrictions were eased.
“However, one month’s data is not enough to change the big picture. Activity is still likely to recover to pre-Covid levels in the third quarter of the year.
“The main misses in May were in construction and retail, both of which will have suffered from the wet weather. The more timely June surveys for both sectors are reassuring, with the construction PMI and the CBI Distributive Trades surveys each hitting new highs.
“In the meantime, consumer and business confidence have continued to recover, the labour market is buoyant, and pipeline inflation pressures are still rising. Policy-makers should therefore still scale back support that now risks doing more harm than good, including the Treasury’s furlough scheme and the Bank of England’s money printing.”
Notes to editors
Contact: Emily Carver, Head of Media, 07715942731
IEA spokespeople are available for interview and further comment.