British economic recovery falters during the summer
Britain’s economic recovery has lost momentum during the summer despite the widespread lifting of coronavirus restrictions as supply chain issues took their toll
LONDON — Britain’s economic recovery lost momentum during the summer despite the widespread lifting of coronavirus restrictions as supply chain issues took their toll, official figures showed Wednesday.
While the Office of National Statistics said the economy eked out some modest growth in August as bars, restaurants and festivals benefited from the first full month without coronavirus restrictions in England, the 0.4% increase was slightly lower than anticipated.
The agency also revised down July’s figure from 0.1% growth to a 0.1% decline as a result of weaker data from a number of industries, highlighting the choppy nature of the economic recovery.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said weakness is “seeping through” the figures especially in the construction sector, which has now reported four straight months of negative growth.
The British economy remains 0.8% below its pre-coronavirus pandemic level of Feb. 2020.
The International Monetary Fund forecast Tuesday that the U.K. will grow by 6.8% this year, more than any other Group of Seven industrial nation, and by a still-high 5% next. However, the British economy experienced the worst recession of the seven in 2020, contracting by 9.8% output.
With inflation set to hit 4% in the coming months amid rising energy bills, productivity levels low, taxes rising and an uncertain COVID backdrop heading into winter, there are worries that the economy will underperform over coming months.
