High-frequency indicators suggest the U.K. economy is running at 85% capacity as it begins to emerge from lockdown, according to economists at Barclays Bank Plc.
Household spending is just 5% off its normal level, economists led by Fabrice Montagne wrote in a report. Indicators of mobility and energy consumption, and interest in car and house purchases are also show a “solid pace of recovery,” it said.
The economists warn that weekly growth rates could slow. Consumers will likely maintain higher savings and be more cautious about spending, while the current bounce in manufacturing and construction will lose steam and supply chain disruption will drag on activity.
With the most deaths linked to the coronavirus after the U.S., the U.K. is starting to loosen its restrictions after more than two months in lockdown. People are now allowed to meet in groups of six in parks and private gardens if they keep to social distancing rules, nurseries and primary schools have restarted for some children, and outdoor markets can open.