The UK economy contracted a touch more than initially estimated in the first quarter as households saved more during the third national lockdown, according to figures released on Wednesday by the Office for National Statistics.
Gross domestic product fell 1.6% between January and March, compared to an initial estimate of a 1.5% decline. That leaves GDP 8.8% below pre-pandemic levels, revised from a first estimate 8.7%.
The household saving ratio rose to 19.9% from 16.1% in the fourth quarter of 2020, hitting its second-highest level on record after a 25.9% surge in the second quarter of last year.
Deputy national statistician for Economic Statistics Jonathan Athow said: “Today’s updated GDP figures show the same picture as our earlier estimate with schools, hospitality and retail all hit by the reimposition of the lockdown in January and February, with some recovery in March.
“With many services unavailable, households again saved at record levels with only last spring seeing more saved.
“Lower imports from Europe and delayed payments to EU institutions cut our total deficit with the rest of the world.”
Paul Dales, chief UK economist at Capital Economics said: “The small downward revision to Q1 GDP growth probably won’t stop the economy from rising back to its pre-pandemic peak in the coming months. And the larger rebound in the household saving rate increases the potential for faster rises in GDP further ahead.”
