Business Briefing

UK’s economy grew by 0.4% in February as EU exports rebound

London home buyers pay ‘park premium’, details leaked of Google Pixel Watch, and other breaking business news

1

Economy 

Construction and manufacturing help drive growth in GDP

The UK’s economy is estimated to have grown by 0.4% in February - driven by a partial rebound in exports to the EU and increased output in sectors such as construction and manufacturing. 

According to data released today by the Office for National Statistics (ONS), construction grew by 1.6% in February, manufacturing increased 1.3% following contraction in January, and the service sector grew by 0.2% as wholesale and retail trade sales “picked up a little”.

The UK economy returned to growth amid Covid-19 restrictions, but the 0.4% rise in gross domestic product (GDP) was smaller than the 0.6% forecast by economists polled by Reuters

Both the GDP and trade data were “heavily affected” by Covid-19 and associated restrictions on business and this shows that the UK economy “still has a long climb back to normality when restrictions are lifted”, the Financial Times says. 

ONS data found that February’s GDP was 7.8% below the levels seen in the same month last year, compared with 3.1% below the initial recovery peak in October 2020.

Meanwhile, post-Brexit exports to the EU partly rebounded in February after a “record slump to the start of the year”, Sky News reports. ONS data showed that exports of goods to the bloc increased by £3.7bn (46.6%) following a record fall of £5.7bn (-42%) in January.

2

Retail 

Retail revival boosted by sales of furniture and men’s clothing

Online sales of furniture and men’s and children’s clothing have spurred a “revival in British retail”, Yahoo! Finance reports. A monthly study issued by the British Retail Consortium and KPMG - which compares 2021 sales figures year-on-two-years instead of year-on-year - showed that total sales increased by 8.3% in March compared to the same period in 2019.

Paul Martin, UK head of retail at KPMG, said last month saw “historic growth rates in online sales” with categories like men’s and children’s clothing and furniture reaching triple digits. He added: “This is testament to how retailers, many of which have spent much of the last year with their doors closed, have embraced trading through lockdown via digital platforms.”

3

Food & Beverage

Pub industry ‘on its knees’ as only two in five reopen in England 

England was “buzzing” as drinkers enjoyed a first night out in months. However, the pub industry has warned that the sector is “on its knees” with only two in five English pubs reopening yesterday. 

Around 2,500 pubs were estimated to have closed for good in 2020 and only those with outdoor facilities are able to reopen following an easing in restrictions. Emma McClarkin, chief executive of the British Beer & Pub Association, told the BBC that “no pub is expecting to profit from reopening outdoors, and many will make a loss”. 

In order for pubs to survive, they need to be “free of restrictions at the earliest opportunity”, said Steve Alton, chief executive of the British Institute of Innkeeping. “This early phase of reopening for many of our pubs will be loss-making, with 40% operating on reduced hours until they can reopen inside in May and fully reopen from 21 June.” 

4

Property

Home buyers in London face ‘park premium’

Demand for bigger properties and open spaces has seen home buyers in London face a “park premium”, The Telegraph reports. The pandemic “sparked an exodus” to the suburbs across the UK and the trend has continued in the capital with prices for high-end homes increasing in prime areas. 

According to estate agent Benham and Reeves, leafy areas such as Wimbledon, Putney and Richmond were in demand in the first quarter of 2021. The agency’s Marc von Grundherr said these locations offer “larger homes but more importantly, both the homes available and the wider areas boast a greater abundance of green space, which has fast become a must-have for high-end homebuyers”.

5

Technology 

Google Pixel Watch details leaked 

Could 2021 finally be the year of the Google Pixel Watch? That’s the question posed by ScreenRant following a YouTube video posted by Front Page Tech’s Jon Prosser. The renowned leaker has provided exclusive details of the device and says “it might be the best smartwatch” he’s seen. 

It’s long been rumoured that the tech giant would launch a rival to the Apple Watch and Prosser believes that the Pixel Watch could be out in October 2021, although it could be pushed back, Forbes reports. 

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