Today’s economic growth figures serve as a reminder that it’s important to be specific about what’s actually being measured. Headline GDP numbers show a contraction of 0.3 per cent in April: worse than what was expected (the forecast consensus was a fall of roughly 0.1 per cent), suggesting a fall in economic activity and output, pushing the UK further towards recession territory.
This is another example of why the technical definition of a recession may not help us much in the coming months either.
But break down the headline number and another narrative emerges. A large driver of negative growth was the ‘significant reduction in NHS Test and Trace’ and vaccine rollout efforts, as demand for these services has greatly diminished. Subtract this part of the equation, and economic growth in April is ever so slightly positive, around 0.1 per cent.
This doesn’t mean the economy is in any kind of rude health: monthly GDP updates have shown the economy to be stagnant, if not contracting, since the start of the year.
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