UK Economic Growth Slowed to 1.3% in Q3

Written by: Keith Tully

UK coinsThe UK economy grew by 1.3 per cent between July and the end of September, which represents a slowdown from the expansion recorded for the previous three months.

Problems within supply chains have been highlighted as a key reason why growth cooled off during the third quarter of the year.

Consumer spending is understood to have increased across the country in Q3 but there were declines in output within several key areas of the economy.

During the second quarter of this year, between April and June, the UK’s overall GDP expanded by 5.5 per cent as the economy reopened after months of heavy restrictions on various everyday activities.

However, with that pace of growth having slowed more recently, the overall scale of the economy remains below where it was at the end of 2019 and prior to the Covid-19 crisis.

The latest figures suggest the UK economy is further behind pre-pandemic levels than is the case for the economies of comparable nations including Germany, Italy, France and the US.

Sectors of the economy that contracted in the third quarter of the year include manufacturing and construction, while operators within the hotel, restaurant and entertainment sectors were generally able to significantly expand the scale of their businesses in recent months.

Chancellor of the exchequer Rishi Sunak has said there remain “challenges to overcome” as Britain and the world look to recover from the worst of the coronavirus crisis.

However, he sought to emphasise the potential positives of the UK’s economic position as it currently stands.

“The economy continues to recover from Covid and thanks to schemes like furlough, the unemployment rate has fallen for eight months in a row and we’re forecast to have the fastest growth in the G7 this year,” he said in a statement.

In response to the latest GDP figures, the Labour Party has called for the government to continue taking actions in support of businesses and the wider economy.

“We need urgent action to keep the economy moving and support households as we head into the winter,” said Bridget Phillipson MP, the Labour Party’s shadow chief secretary to the Treasury.

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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