The increase signalled the best monthly growth performance since July 2020.

The economy was helped in April by the easing of restrictions on the 12th of the month, including the re-opening of non-essential retailers. It is also evident that increasingly confident consumers and businesses had become more active during March when GDP grew 2.1% m/m.

Growth in April was due to services output growing 3.4% month-on-month. However, there was contraction in industrial production (1.3%), and construction output (down 2.0%).

On the expenditure side of the economy, it appears consumers were more willing and able to spend in April following the re-opening of non-essential retailers: retail sales volumes increased 9.2% m/m over the month.

The economy appears to have built on April’s strong performance in May, with a range of recent surveys strongly positive. Easing restrictions in April and May have boosted an economy that was already starting to improve as the road map out of lockdown lifted business and consumer confidence. This boost has seemingly been reinforced by the near-term supportive measures contained in March’s Budget.

Economic forecaster the EY ITEM Club, expects GDP growth for the second quarter of this year to be around 5% quarter-on-quarter and the economy to grow 6.8% over 2021. Currently, the EY ITEM Club says there look to be mounting upside risks to this forecast.

Howard Archer, chief economic advisor to the EY ITEM Club, said that the economy had “already shown signs of improvement” as the first quarter progressed, despite lockdown restrictions persisting, with businesses and consumers becoming more confident in the outlook as the COVID-19 vaccines were rolled out.

He said: “It also appears that consumer and business confidence was helped from early March by the Government setting a road map out of lockdown and by the additional near-term supportive measures for jobs and the economy included in the 3 March Budget.

Mr Archer continued: “April’s month-on-month GDP growth was due to services output growing 3.4% month-on-month. The ONS reported this was due to ‘consumer-facing services re-opening in line with the easing of coronavirus restrictions and more pupils returning to onsite lessons.’

“However, construction output fell back 2.0% month-on-month in April after strong growth in March. Meanwhile, industrial output fell 1.3% month-on-month as there was a significant fall of 15.0% month-on-month in the oil and production sector due to maintenance work. Manufacturing output edged down 0.3% month-on-month.”

Commenting on the outlook, he added: “Following a first quarter GDP contraction, the economy looks well on course for a very healthy rebound in the second quarter given reduced restrictions and the ongoing successful roll-out of COVID-19 vaccines.

“Consumers look well-placed to play a leading role in the UK recovery thanks to the recent high savings ratios, especially as it now looks likely that unemployment will have a much lower peak than had been expected. The jobs situation has been helped by the recent resilience of the labour market, the development of a robust recovery, and the extension of the furlough scheme to September.

“Additionally, after an extended period of weakness, business investment is expected to gain momentum over the course of the year as companies grow more confident in the economy and their own prospects. This should be supported by the tax incentive to invest in the Budget, and there is evidence in the latest surveys that business investment is picking up.”