The UK economy is showing signs of recovery despite shrinking by 1.5 per cent in the first three months of 2021.

Official figures from the Office for National Statistics show GDP has contracted by 8.7 per cent on pre-pandemic levels.

But after a 2.5 per cent fall in January, it rose by 0.7 per cent in February and 2.1 per cent in March - the highest monthly growth since August.

Earlier this month, the Bank of England predicted the fastest growth in the economy for more than 70 years as restrictions are removed.

The ONS said construction had already returned to pre-pandemic levels.

CBI lead economist Alpesh Paleja said: "While latest data confirms the economy was hit once again by a renewed lockdown at the turn of the year, the fall in activity was much smaller compared with spring 2020.

"Households and businesses have clearly adapted better to working and living under Covid restrictions, despite the brutal cost of doing so."

He continued: "A range of indicators, including CBI business surveys, point to a rebound in activity heading into summer - with the economy opening up and pent-up demand waiting to be unleashed.

"But this is a recovery that will be felt more by some. Undoubtedly, hardest-hit sectors and households have a longer road ahead."