The fight for the UK economic recovery continues

UK GDP rose 2.1% in August, but economic output remains 9.2% below pre-pandemic levels, figures from the Office for National Statistics show.

GDP growth was lower than increases of 6.6% in July and 8.7% in June.

“The economic recovery has been more difficult than we expected.”

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The UK’s economic rebound since the end of the lockdown has wavered, and momentum slowed sharply in August, crushing hopes for a sustained recovery from the crisis in the US. Coronavirus.”

“This was despite a huge 71.4% increase for the hospitality industry in August, as the Eat Out to Help Out program drew customers to restaurants and international travel restrictions drove domestic stays.”

“Most other sectors of the economy languished, manufacturing increased just 0.7% and production of cars and aircraft is still much lower than at the beginning of the year. Construction rose 3% but is still 10.8% lower than in February.”

She added: “This trend does not bode well for the next few months as new restrictions have been imposed on the hospitality industry, with venues forced to close at 10 pm and local closures implemented, suggesting that the sector will not it will act as a support for the economy in general.”

“Other government data on the social impacts of the coronavirus showed that levels of socializing, eating out, and traveling have started to decline after rising during the summer.”

“These are initial estimates and could be subject to revision, but GDP figures indicate that far from a strong V-shaped recovery from the 20.4% contraction in the second quarter of 2020, we should expect a very bumpy road, even a W-shaped path that seems more possible.”

“The termination of the leave plan, with the replacement job support plan only supporting employees who can support part-time, is expected to lead to more mass layoffs.”

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