UK households raised their savings sharply in early 2021 as coronavirus lockdowns closed bars, restaurants and many shops, potentially boosting their spending power as the restrictions are gradually lifted.

The UK savings ratio, which measures the income households saved as a proportion of their disposable income, rose to 19.9% from 16.1% in the fourth quarter of 2020, the Office for National Statistics said.

That was the second-highest savings ratio on record after a leap to 25.9% in the second quarter last year during the first coronavirus lockdowns.

Today's data also showed Britain's economy shrank a bit more than previously thought in the January-March period as gross domestic product contracted by 1.6% in the first quarter.

The ONS had previously estimated GDP shrank by 1.5% in the first quarter.

Household spending was weaker than first estimated.

The hit to GDP in early 2021 was just a fraction of the roughly 20% slump in the second quarter of 2020 when Britain was in its first lockdown.

Many businesses have adapted to the rules by, for example, ramping up their online operations.

Separate figures from the ONS showed Britain's current account deficit narrowed to £12.828 billion in the first quarter as the tightening of coronavirus rules hit the economy and hurt demand for imports.

The balance of payments shortfall was equivalent to 2.4% of GDP compared with 4.8% in the fourth quarter of 2020.