UK’s growth figures dim any hope of a V-shaped recovery from Covid-19

Britain’s recovery from the worst slump in three centuries is going to be long and painful if May’s figures for GDP are a guide.

The turnaround from a slump of more than 25% in March and April was lower than many economists expected at 1.8% – a paltry figure that left the economy down 19.1% in the three months to May.

This was not the V-shaped recovery the chancellor needed. And the early signs of this stuttering growth path was most likely what prompted Rishi Sunak to push for a faster easing of the lockdown.

While manufacturing output jumped by 8.4% and construction output increased, especially in the housebuilding sector, there was little else to cheer.

The services sector was still sinking and sinking fast in May as consumers held back from shopping for almost all goods and services except the bare essentials.

Industrial production, which includes energy and manufacturing, was still down 20% from February.

There will be some who argue that this timid exit from the lockdown was inevitable after the UK took such a heavy toll in Covid-19 deaths compared with other countries.

But France and Italy also suffered badly from the disease and yet have bounced back strongly in the last couple of months, even outstripping Germany.

The common denominator appears to be trust and the public’s trust in their governments in particular.

Harsh decisions were made by French president Emmanuel Macron and Italy’s prime minister Giuseppe Conte that dictated how people should behave and what businesses needed to do to avoid being fined.

While it was decried in some quarters for impinging on civil rights, the bulk of the French and Italian people have appreciated the strict rule making and the lessening of risk to their health this has brought.

It is clear from May’s figures that the UK government has delayed the recovery by its dithering and delay.

Boris Johnson has finally said masks must be worn in shops, although not until 24 July, a decision that has taken three months to make when other countries adopted the measure immediately.

The cost looks like it will be felt in jobs over the coming months. Provisional data released last month showed the number of employees fell 621,000, or 2.1% from February to May. The trend continues in June.

Britain needs a V-shaped recovery, but doesn’t look like it is going to get it.

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