london skyline

United Kingdom GDP January 2021

United Kingdom: Economic activity drops at sharpest pace since April 2020 in January

GDP slid 2.9% in month-on-month seasonally-adjusted terms in January, which contrasted December’s 1.2% increase. The figure marked the sharpest drop since April 2020, and was driven by the imposition of a third national lockdown in the month which saw schools and non-essential businesses close. That said, the fall was notably shallower than market expectations.

On a rolling quarterly basis, GDP decreased 1.7% in November last year to January, contrasting October–December’s 1.0% expansion.

Economic activity will be downbeat in Q1 as a whole on tough restrictions. However, momentum should build from Q2 as vaccines are rolled out, restrictions are progressively scaled back and additional fiscal stimulus supports demand.

Commenting on the outlook were analysts at Berenberg:

“We expect a strong consumer-led recovery from spring onwards as savings normalise, face-to-face services re-open and manufacturers step-up production to meet rising demand. We project real GDP gains of 6.2% in 2021 and 5.7% in 2022, with output reaching its pre-pandemic level by Q2 2022”.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest