GDP Recovery Slowing Again After Summer Surge, Says ONS

Written by: Keith Tully

GDPThe latest official figures on the UK’s economic output have shown that September saw a significant deceleration of growth after a summer of rapid expansion.

According to the Office for National Statistics (ONS), the economy grew by around 15 per cent during the third quarter of the year but by just 1.1 per cent in September.

Headline GDP for the country shrank very sharply in the early weeks of the coronavirus pandemic but expanded at a rapid pace once the initial lockdown was relaxed over the summer.

Indeed, the growth rate of 15 per cent for the third quarter of the year was an unprecedented rate of expansion for a single quarter.

However, GDP figures for the fourth quarter of 2020 are likely to reflect the fact that coronavirus-induced restrictions had to be reintroduced again by the time autumn came around.

The ONS has said that the overall size of the economy increased by 9.1 per cent in June, by 6.3 per cent in July, by 2.2 per cent in August and then by just 1.1 per cent in September.

Children being able to return to school is understood to have had a notable impact on boosting activity across the economy, while the government’s ‘Eat Out to Help Out’ initiative also gave a lift to the struggling hospitality sector over the summer.

However, both the manufacturing and the construction sectors have been operating notably below their usual output levels throughout the pandemic, and the economy overall was about 8.2 per cent smaller in September than it was in February.

The services sector, which accounts for the lion’s share of the UK’s economic output, is an estimated 8.8 per cent less active than it was before the initial lockdown started in late March.

Chancellor Rishi Sunak responded to the ONS’ latest data by saying: “Today’s figures show that our economy was recovering over the summer, but started to slow going into autumn.

“The steps we’ve had to take since to halt the spread of the virus mean growth has likely slowed further since then.

“There are still hard times ahead, but we will continue to support people through this and ensure nobody is left without hope or opportunity.”

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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