Britain's economy took a first step on the long road to recovery from the Covid-19 crisis in May, as activity began to pick up after lockdown restrictions began to ease.

But today's figures showed less of a rebound than economists had forecast. 

Gross domestic product rose by 1.8% in May after slumping by a record 20.3% in April, Britain's first full month of lockdown, the Office for National Statistics said.

The figure was below all forecasts in a Reuters poll of economists. 

Over the three months to May, the economy shrank by 19.1% and compared with a year ago it is 24% smaller.

"The pick-up in output in May is more likely to reflect the partial release of pent-up demand as restrictions began to loosen, rather than evidence of a genuine recovery," said Suren Thiru, head of economics at the British Chambers of Commerce. 

The weak rebound was driven by just 0.9% growth in Britain's large services sector, with weakness in professional services, commercial property and computer programming. 

More than 44,000 people in Britain have died from the disease, the highest death toll in Europe. 

The UK government closed non-essential shops and other businesses to the public on March 23, shortly after ordering the closure of bars, restaurants and cinemas. 

In May, there was a limited relaxation of lockdown rules, and more businesses became used to operating under the new restrictions. 

Private sector data has shown some signs of recovery in May and June, as lockdown measures eased, but the Bank of England has warned that a big rise in unemployment is likely later this year as temporary job support measures end. 

"Today's figures underline the scale of the challenge we face. I know people are worried about the security of their jobs and incomes," finance minister Rishi Sunak said after today's data.

Last week Rishi Sunak announced an extra £30 billion of stimulus to limit the increase in unemployment.

UK economy could shrink 14% this year - budget forecasters

The UK economy could shrink by more than 14% this year if there is lasting damage from the coronavirus, a scenario that would push government borrowing to more than £390 billion, budget forecasters said today. 

The Office for Budget Responsibility, whose projections are used by the UK government, said tax hikes or spending cuts would probably be needed to fix the huge hole in the public finances. 

"The UK is on track to record the largest decline in annual GDP for 300 years, with output falling by more than 10% in 2020 in all three scenarios," the OBR said in a report. 

"This delivers an unprecedented peacetime rise in borrowing this year to between 13% and 21% of GDP, lifting debt above 100% of GDP in all but the upside scenario," it added. 

The central scenario, with only moderate long-term damage, showed a 12.4% fall in output, with a 14.3% decline if the scarring is deeper. 

In the downside scenario, borrowing in the current financial year could hit £391 billion, and in the upside one £263 billion, with output falling 10.6%. 

Last month, the International Monetary Fund said Britain's economy looks set to shrink by more than 10% this year. 

The OBR scenarios do not incorporate gross national product data published today, which showed a only a modest return to growth in May following the lockdown. 

Nor do they include measures announced by finance minister Rishi Sunak last week that could cost up to £30 billion, which the OBR said would have had a material effect on the borrowing outlook. 

An increase in Britain's historically low borrowing costs could leave government finances vulnerable, given the sharp rise in debt, the OBR said. 

Even under the most optimistic scenario, the unemployment rate looks likely to peak at almost 10% in the third quarter of 2020, it added, with its downside scenario showing the peak at 13.2% in early 2021.