Britain’s locked-down economy shrank by 1.5% in the first quarter of the year, official figures show.
The data covers a period when a resurgence in coronavirus cases resulted in renewed restrictions including school and shop closures and “stay at home” advice.
But the impact on the economy appears to have been much smaller than during the first lockdown last year when gross domestic product (GDP) shrank by nearly a fifth over the April-June period.
Overall, 2020 saw GDP shrink by nearly 10%.
But experts think the resilience of businesses throughout the latest lockdown, added to a strong bounce-back as restrictions ease for the remainder of the year, will result in 2021 seeing the strongest annual growth since the Second World War.
A month-by-month breakdown of the latest data from the Office for National Statistics (ONS) shows GDP shrank by 2.5% in January but grew again, by 0.7%, in February, and expanded by 2.1% in March.
The ONS figures showed the economy was still 8.7% smaller than where it was at the end of 2019.
Britain’s tough start to the year has also been affected by a slump in trade with the EU following the end of the Brexit transition period, which resulted in additional red tape and costs.
The latest figures showed that exports to the continent had by the end of March recovered almost to December levels though imports from the bloc remained sluggish.
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.”