Hospitality businesses help UK's economic fightback in May, figures show

Pubs, bars and restaurants have led the charge in helping the UK's economy grow in May, official figures show.

Official figures compiled by the Office for National Statistics (ONS) show that the UK's economy grew by 0.8% last month.

The hospitality sector has been buoyed by the reopening of indoor seating, and a rise in consumer confidence.

Hotels and B&Bs have also helped the UK's economic recovery as Brits book domestic getaways.

Despite the growth, the ONS said gross domestic product (GDP) - a measure of economic growth - had slowed from a 2.3% rise in April.

Analysts had predicted the economy would report a 1.5% increase for the month.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The economy grew for the fourth consecutive month, albeit at a slower pace than seen recently, but remains around 3% below its pre-pandemic peak.

“Pubs and restaurants, who were again able to welcome indoor guests, were responsible for the vast majority of the growth seen in May. “Hotels also saw a marked recovery as restrictions lifted.”

A breakdown of figures show:

• Services - up 0.9% (down 3.4% from pre-pandemic level)
• Manufacturing - down 0.1% (down 3.0% from pre-pandemic levels)
• Construction - down 0.8% (up 0.3%)

The accommodation industry grew by 49.3% between April and May 2021 after lockdown restrictions were eased, although output was still 38.9% below its February 2020 level. This was driven by growth within hotel accommodations.

Food and beverage service activities saw strong growth, with a rise of 34.0% between April and May 2021, although output was still 9.4% below its February 2020 level.

People queue for shops at the opening of the St James Quarter shopping centre in Edinburgh. The first phase of the new shopping centre has opened after five years of construction. Issue date: Thursday June 24, 2021.
Jane Barlow

The growth was driven by pubs, bars and restaurants that could begin to serve customers indoors part-way through the month. Event catering and other food service activities also rose, as restrictions on large gatherings continued to ease.

GB News Business and Economics Editor Liam Halligan said despite the growth, the figures were "disappointing" - but there was also reason for optimism.

"Let's not be too down on this. The economy is expanding, the vaccine programme is very good, I think everyone expects Freedom Day to happen on July 19.

"There's a lot of positives in these numbers, but not quite as positives as we expected. "There will be more jobs in the autumn, the economy will recover.

"If we can recover the biggest hit to our economy in 300 years in just two years, that's not too bad."