UK economy grew by 2.1% in August thanks to Eat Out to Help Out but pace of recovery slowed

UK economy grew by 2.1% in August thanks to Eat Out to Help Out but pace of recovery slowed


THE UK economy grew by 2.1% in August thanks to the Eat Out to Help Out scheme but the pace of recovery slowed.

The GDP rise is the fourth consecutive monthly increase after the economy took a serious hit during the peak of the coronavirus crisis.

But it's less than half of what experts had expected, and a major slowdown since July, the figures by the Office for National Statistics (ONS) show.

Analysts expected that GDP would increase by 4.6%, according to a surveyby Pantheon Macroeconomics.

In July, GDP was up by 6.4%, and in June it rose by 9.1%, according to ONS data.

GDP for August is 21.7% higher than its April low, when the economy crashed 19.5%, but it remains 9.2% below February's level.

Monthly GDP estimates are subject to more uncertainty than usual though and could change.

The accommodation and food services sub-sector boosted GDP in August, as the combined impact of the easing of lockdown rules, the Eat Out To Help Out scheme, and people choosing summer staycations, the ONS said.

Suren Thiru, head of economics at the British Chambers of Commerce (BCC), said: "The sharp slowdown in growth indicates that the recovery may be running out of steam, with output still well below pre-crisis levels.

"The increase in activity in August largely reflects a temporary boost from the from the economy reopening and government stimulus, including the Eat Out to Help Out Scheme, rather than proof of a sustained ‘V’-shaped recovery.

“Although the UK remains on course to exit recession in the third quarter, the looming triple threat of surging unemployment, further restrictions and a disorderly end to the transition period means the recent rally in economic output is likely to be short-lived."

More to follow…

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