Britain's Covid bounceback stalls as GDP grows just 0.1% in July
Britain’s Covid bounceback grinds to a halt as the economy grew just 0.1 PER CENT in July amid ‘Pingdemic’ and supply chain disruption
- GDP grew just 0.1 per cent in July well below 0.5 per cent expected by analysts
- Rebound stalled as the ‘Pingdemic’ and supply chain disruption caused issues
- Economy still below pre-pandemic high with fears tax rises will dampen growth
The UK’s Covid bounceback has all-but ground to a halt as the economy grew by just 0.1 per cent in July.
Official figures showed that despite restriction easing in England GDP barely expanded amid the ‘Pingdemic’ and supply chain issues.
The level was down from 1 per cent in June and far below the expectations of analysts, who had pencilled in around 0.5 per cent. The economy is still 2.1 per cent below its pre-pandemic high.
Chancellor Rishi Sunak tried to put a brave face on the disappointing data, saying the recovery was ‘well underway’.
ONS Deputy National Statistician for Economic Statistics Jonathan Athow said: ‘After many months during which the economy grew strongly, making up much of the lost ground from the pandemic, there was little growth overall in July.
‘Oil and gas provided the strongest boost, having partially bounced back after summer maintenance. Car production also continued to recover from recent component shortages.
Official figures showed that GDP barely expanded amid the ‘Pingdemic’ and supply chain issues
‘The service sector saw no growth overall with growth in IT, financial services and outdoor events – which could operate more fully in July – offsetting large falls in retail and law firms.
‘Meanwhile, rising costs and shortages of raw materials pegged back the construction sector again.’
Production output was the main positive contributor, getting 1.2 per cent bigger in July.
But construction contracted for a fourth consecutive month, down by 1.6 per cent on the month.
Mr Sunak said: ‘Our recovery is well underway thanks to the success of the vaccination rollout and the roadmap, with more employees on payrolls that at any point since last March.
‘I am confident that – supported by our Plan for Jobs – we’ll continue to recover from the pandemic, we’ll see more new jobs, and we will Build Back Better.’
The British Chambers of Commerce (BCC) warned yesterday that there is a ‘real danger’ the Government’s health and social care levy could further stifle the economic bounce-back from the pandemic.
The BCC slashed its forecast for third-quarter growth to 2.8 per cent from 3.5 per cent previously as it said the supply chain disruption and hiring difficulties are offsetting the boost from July’s full lifting of coronavirus restrictions.
The supply and lorry driver woes have left supermarket shelves increasingly bare in recent weeks and are hitting sectors from hospitality to housebuilding.
The UK is still set to see the strongest growth since official records began in 1949 as a whole over 2021.
But the rebound is from a low base as the impact of the pandemic was so devastating.
Chancellor Rishi Sunak has been hoping for a strong economic rebound from Covid as he tries to rebuild the public finances
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