UK gross domestic product (GDP) rose 4.8% between April and June according to data released this morning by the Office for National Statistics.

The figure was slightly below the 5% forecasted by the Bank of England, but Chancellor Rishi Sunak said that he is confident that the UK economy will continue to recover to pre-pandemic levels.

Consumer spending rise 7.3% over the quarter, ahead of expectations, as Coronavirus pandemic restrictions came to an end.

The Office for National Statistics estimated monthly growth at 1%, higher than expected by most economists.

Rupert Thompson, chief investment office at wealth manager and Financial Planner Kingswood, said he expects the economy to recapture all its pandemic losses by the end of 2021.

He said: “UK GDP posted a larger than expected 1.0% gain in June and is now only 2.2% below its pre-pandemic level in February 2020. Over Q2 as a whole, GDP increased a hefty 4.8% with consumer and government spending the main drivers of the gain. Growth is likely to have slowed a notch in July as the pingdemic will have taken its toll but even so activity still looks on track to recapture all of its pandemic losses by year-end.”

Steve Clayton, fund manager at Hargreaves Lansdown’s HL Select, said the latest figures from the ONS should help allay fears that the economy is set for another dip with the rise of the Delta Coronavirus variant in the UK.

He said: “These figures knock fears over the impact of the Delta variant on the head. Consumers are continuing to spend, regardless. The economy is still some 4.4% smaller than it was at the end of 2019, but is clawing that back with each month. With the big surge of the initial reopening behind us, we expect the pace of growth to moderate over the remainder of the year. But if businesses pick up the baton and start investing to support growth once more, then we could see upside to our already positive view of the prospects for the UK economy this year.”

However, Paul Craig, portfolio manager at Quilter Investors, had a more cautious view of the GDP figures and called for the Bank of England to take action to protect the UK economy from inflation.

He said: “The government will be pleased to see household consumption is driving the economic recovery and will hope this will continue into the summer and beyond as restrictions are now essentially non-existent. With staycations on the cards for the vast majority of the population and air travel tentatively reopening, Rishi Sunak will be hopeful that people keep spending those accumulated savings in the UK.

“There is further optimism for the government too. This Q2 reading will not take into effect ‘freedom day’ and with confidence ever increasing the economy is heading in the right direction. Indeed, the UK was the fastest growing economy in Q2 compared to international peers, something that can be attributed to the huge initial success of the vaccination programme. 

“That said, economic uncertainty remains strife. Supply chains remain disrupted and the global semiconductor shortage weighed on vehicle production in the UK during Q2. In addition, the depth of the scarring is still yet to show itself, while the winding down of the furlough scheme will give us a better idea of how the economy has shifted in the past 18 months. Furthermore, inflation remains a concern and if economic growth is sustained there will be increasingly louder calls for the Bank of England to act. The thinking is it remains transitory for now, but either way the time is coming for the BoE of to tighten in some way or another.”