The UK economy shrank during the first three months of 2021 as lockdown measures hindered the country’s recovery.

UK GDP contracted 1.5% during the quarter, according to the Office for National Statistics, after a third national lockdown forced businesses across the country to close their doors again.

However, GDP is estimated to have increased 2.1% during March – the fastest monthly growth since last August – as schools in some parts of the UK reopened. 

The service sector, which includes retail, grew 1.9% during March, the ONS said, suggesting that retail sales continued to “show strength”. 

The impact of the third national lockdown appears to have been much reduced compared with the first “stay at home” instructions from the government.

GDP shrank by almost 20% between April and June last year, while the economy contracted almost 10% across 2020 as a whole.  

The British economy, however, remains 8.7% smaller than it was at the end of 2019.

Despite the first-quarter setback, experts predict the reopening of retail, hospitality and schools, coupled with the vaccine roll-out, will spark the economy’s strongest annual growth since the Second World War. 

Chancellor Rishi Sunak said: “Despite a difficult start to this year, economic growth in March is a promising sign of things to come.

“Even with this positive news, we know that many businesses and people still need our help, and that’s why I want to reassure everyone today that our plan for jobs will continue to create, support and protect jobs in the coming months.”