Lockdown hits UK GDP less than feared

Britain's economy shrank by less than feared in January, despite the country being in lockdown.

Gross domestic product was 2.9% lower than in December, a much smaller contraction than forecast in a Reuters poll of economists.

The Bank of England has predicted the economy will shrink by 4% in the first quarter of this year.

But it's expected to keep its stimulus programmes on hold at the end of its meeting next Thursday (March 18).

It's thought the central bank will predict that Britain's vaccination programme - Europe's fastest - will trigger a bounce-back in the economy.

But there were some red flags in Friday's (March 12) data.

Trade with the European Union was hit hard at the start of the country's post-Brexit trading relationship.

Exports and imports from Britain to the EU plunged by the most on record.

Although the Office for National Statistics said there was a delay in gathering some data.

Exports of goods to the EU, excluding non-monetary gold and other precious metals, slumped by over 40%.

While imports fell by nearly 29%.

The ONS said the overall GDP figures were hit mostly by the impact of social distancing rules on Britain's huge services sector.

Prime Minister Boris Johnson plans to ease restrictions gradually before lifting most of them by late June.