UK economy grew by 6.6 per cent in July but Britain’s coronavirus rebound is slowing down and GDP is still almost 12 per cent below pre-lockdown levels
- Office for National Statistics found UK economy grew by 6.6 per cent in July
- But the economic rebound is slowing after 8.7 per cent growth reported in June
- Meanwhile, the UK’s GDP is still some 11.7 per cent below pre-lockdown levels
- UK has now clawed back around half of the output it lost following lockdown
The UK economy grew by almost seven per cent in July but Britain’s rebound from the coronavirus crisis is slowing down with GDP still almost 12 per cent below pre-lockdown levels.
The Office for National Statistics announced this morning that UK GDP had grown by 6.6 per cent in July – the third consecutive month of growth.
However, the recovery was slightly worse than expected after a consensus of analysts had predicted a 6.8 per cent month-to-month increase while overall GDP remains down 11.7 per cent overall.
Hopes of a swift recovery from the crisis also took a hit as the speed of the bounce back slowed following 8.7 per cent growth which was recorded in June.
The ONS said the UK has now clawed back around half of the output it lost after the pandemic fully hit the economy.
The UK economy grew by 6.6 per cent in July – the third consecutive month of growth – but lower than the 8.7 per cent recorded in June
Chancellor Rishi Sunak is under pressure from business to bring forward fresh support measures to ensure the economy continues to recover
The statistics body reported growth across all of the major sectors of the British economy, with particularly strong growth in the construction industry.
Construction output jumped by 17.6 per cent in July, driven by an increase in new housing, but still remained 11.6 per cent below the level reported in February.
Meanwhile, the production sector reported output seven per cent below pre-Covid levels after it grew by 5.2 per cent in July following an increase in manufacturing.
The services sector increased by 6.1 per cent in July, below analysts’ predictions, after restaurants, pubs and cafes were given the green light to welcome customers again.
Darren Morgan, the director of economic statistics at the ONS, said: ‘While it has continued steadily on the path towards recovery, the UK economy still has to make up nearly half of the GDP lost since the start of the pandemic.
‘Education grew strongly as some children returned to school, while pubs, campsites and hairdressers all saw notable improvements.
‘Car sales exceeded pre-crisis levels for the first time, with showrooms having a particularly busy time.
‘All areas of manufacturing, particularly distillers and car-makers, saw improvements, while house-building also continued to recover.’
The British Chambers of Commerce welcomed the growth figures but warned that without new Government support there is ‘little prospect of a sustained resurgence’, especially with the furlough scheme set to end next month.
The BCC’s head of economics Suren Thiru said: ‘The latest data confirms that UK economic activity continued to pick-up in July as lockdown restrictions eased further.
‘The UK economy is currently in a period of temporary calm, with activity buoyed by the government’s emergency support measures and the unwinding of pent-up customer demand as more parts of the economy reopened.
The coronavirus lockdown had a devastating impact on the UK economy as it shrunk by more than 20 per cent in the second quarter of 2020
‘However, with many firms continuing to face an unprecedented cash crisis and unemployment likely to surge as the support schemes wind down, there remains little prospect of a sustained resurgence unless substantial action is taken.’
James Smith, research director at the Resolution Foundation think tank, said: ‘The UK economy continued to rebound over the summer as lockdown restrictions eased.
‘But it’s the level of activity that matters, which remains hugely down on pre-pandemic levels.
‘More worryingly, the rise in Covid cases and return of public health restrictions means we are coming towards the end of the easy economic wins from restarting activity.
‘With emergency support to firms and workers being withdrawn, far tougher times lie ahead this autumn.’