Shopping trips set to fuel economic rebound

Britain is set for a "sharp snap back" in spending by shoppers as restrictions ease, according to experts at Deloitte.

The firm found "going to a shop" topped the list of leisure activities people are most likely to do after lockdown.

Separate research suggested that the UK's economy will grow at its fastest rate on record this year, helped by the rebound in consumer spending.

The EY Item Club said the economy had "proven to be more resilient than seemed possible".

The forecasting body has upgraded its 2021 growth forecast from 5% to 6.8%, which would mark the fastest rate seen since Office for National Statistics (ONS) records began.

Confidence returns

The UK's GDP, which measures all the activity of companies, governments and individuals in the economy, shrank by a record 9.9% last year as coronavirus restrictions hit output, according to the ONS.

But EY expects that the UK economy will return to its pre-pandemic size in the second quarter of 2022 - three months earlier than previously forecast.

Deloitte's research also suggested that the UK could be on track for a faster economic rebound than previously thought.

Consumer confidence increased at the fastest rate in a decade in the first three months of 2021, according to its survey of 3,000 adults between 19 and 22 March.

The survey found that six out of 10 people said they planned to return to the shops within a month of restrictions lifting.

Ian Stewart, chief economist at Deloitte, said: "The UK is primed for a sharp snap back in consumer activity.

"High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months."

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The economists at EY's Item Club also revised down their unemployment forecasts. The rate is now expected to reach 5.8% towards the end of this year, down from the 7% predicted in January.

EY's chief economic adviser, Howard Archer, said that the latest forecast suggested the economy would "emerge from the pandemic with much less long-term 'scarring' than was originally envisaged and looks set for a strong recovery over the rest of the year and beyond".

He added : "While restrictions have caused disruption, lessons learned over the last 12 months have helped minimise the economic impact."

In England and Wales, non-essential retail was allowed to reopen on 12 April.

Shops in Scotland will be allowed to reopen fully from Monday, while Northern Ireland is due to see non-essential retail reopen on 30 April.

Separate research published last Friday suggested that the recent easing of lockdown measures had triggered a surge in activity among UK firms.

A closely watched survey, produced by IHS Markit/CIPS, indicated that the looser restrictions had led to the fastest UK private sector growth since late 2013.

The IHS Markit/CIPS Purchasing Managers' Index (PMI) rose to 60 in April, according to initial findings, up from 56.4 in March. Any figure above 50 indicates expansion.

The service sector grew faster than manufacturing for the first time since the Covid crisis began, the survey found, largely down to the reopening of non-essential shops seen in April.