The UK economy is growing again – but GDP data says more about depths of crisis than the shape of recovery

Commenting on the ONS GDP data for May 2020, which showed that the economy grew by 1.8 per cent between April and May (the largest monthly increase in over seven years), but is still down 24.5 per cent on February 2020, James Smith, Research Director of the Resolution Foundation, said:

“Today’s data tells us that the UK economy started to recover as lockdown restrictions were eased in May. But what would normally be seen as strong growth in May of 1.8 per cent mainly reflects the depth of the lockdown’s economic damage, rather than a swift or V-shaped recovery. The economy was still just three-quarters of the size it was as recently as February.

“While we should expect strong immediate bounce backs in many sectors, such as retail which grew by 12 per cent in May, what recovery we actually see from here will depend on how people respond to the easing of restrictions and, crucially, the course of the public health crisis. Ultimately, the UK economy is unlikely to return to close to its pre-covid economic path until a vaccine or treatment is found.”