Chamber urges caution as economy grows

The UK economy grew by 2.3 per cent in April - its fastest monthly rise since July last year, the Office for National Statistics (ONS) announced today.

Customers spent more on the high-street as non-essential shops re-opened and people bought more cars and caravans.

The ONS said there was also more spending in pubs, cafes and restaurants as restrictions eased. But the UK economy is still 3.7 per cent below its pre-pandemic peak. Main points from the ONS:

• The service sector grew by 3.4 per cent in April 2021, with consumer-facing services re-opening in line with the easing of coronavirus restrictions and more pupils returning to onsite lessons.
• Output in the production sector fell by 1.3 per cent in April 2021, the first fall since January 2021 as three of the four sectors contracted.
• Total exports of goods, excluding precious metals, fell slightly by £0.1 billion (0.6 per cent) in April 2021 after two consecutive months of growth, with falls in exports to non-EU countries offsetting increases to EU countries.
• Total imports of goods, excluding precious metals, increased by £1.4 billion (3.9) in April 2021, with increases seen with both non-EU and EU countries.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “It 's reassuring to see that economic output continued its upward trajectory throughout April as we saw non-essential retail businesses reopen, schools stay open for the whole month and an easing of restrictions for hospitality businesses.

“Clearly, we are now seeing a release of pent up demand and no doubt consumer spending will continue to fuel a recovery especially if the good weather stays in place and the country enjoys a good run at the Euro 2020 championships.

“However, there are a couple caveats to consider - namely, the spread of the Delta variant could have a knock-on impact on the Government 's plans to continue its gradual easing of restrictions.

“In addition, the Bank of England will have to carefully manage inflationary pressures if spending continues to rise- early analysis from our Quarterly Business Report reveals that local firms are increasingly concerned around the impact of inflation on their output.

“It was also interesting to see a pick-up in export activity with the European Union - for those businesses that are keen to expand their international ties, I would urge everyone to attend the Chamber 's upcoming Global Trade Conference which will offer insight on how local firms can strengthen their overseas offering and explore new markets.

Chancellor Rishi Sunak said that the figures were "a promising sign that our economy is beginning to recover".

He added that more than one million people had come off the government's furlough scheme in March and April as businesses re-opened.

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