Lockdown Hits U.K. GDP Less Than Feared, but Brexit Pummels Trade

Britain’s economy shrank by less than feared in January when the country went back into a coronavirus lockdown, but trade with the European Union was hammered as new post-Brexit rules kicked in, Reuters reported. Gross domestic product was 2.9% lower than in December, the Office for National Statistics said. Economists polled by Reuters had expected a contraction of 4.9% and government bond prices fell as investors took the data as a sign that the Bank of England was less likely to pump more stimulus into the economy. Britain suffered its worst economic slump in three centuries last year when it shrank by 10%. It has also been hit with Europe’s biggest COVID-19 death toll of over 125,000 people. But the country is racing ahead with vaccinations and, after Friday’s figures, economists said they expected the economy would shrink by 2% in the first quarter of 2021, half the hit forecast by the BoE only last month. Read more.