UK economy saw big bounceback in summer before fresh curbs

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November 12, 2020 4:00 PM

That quarterly growth did not make up for the record 19.8 per cent fall recorded in the second quarter when much of the economy was shuttered in connection with the coronavirus lockdown, and the 2.5 per cent fall in the first three months of the year.

Despite the third-quarter improvement, the statistics agency said the economy is still 9.7 per cent below where it was before the pandemic at the end of 2019.

The British economy bounced back strongly in the third quarter of the year as many of the restrictions associated with the spring lockdown were lifted, official figures showed Thursday.

The Office for National Statistics said the economy grew by 15.5 per cent in the July to September period. Though that was in line with market expectations, the recovery clearly eased in September, with monthly growth of only 1.1 per cent, a clear sign that the recovery was already running out of steam before a resurgence of the coronavirus led to the reimposition of restrictions.

That quarterly growth did not make up for the record 19.8 per cent fall recorded in the second quarter when much of the economy was shuttered in connection with the coronavirus lockdown, and the 2.5 per cent fall in the first three months of the year. Despite the third-quarter improvement, the statistics agency said the economy is still 9.7 per cent below where it was before the pandemic at the end of 2019.

And the worry is that the economy will shrink again in the fourth quarter of the year after the resurgence of the virus led to fresh curbs on everyday life across the UK England, for example, is in the midst of a four-week lockdown until December 2.

Britain’s COVID crisis, and its recovery phase, will take far longer than many people first thought,” said James Smith, research director of the Resolution Foundation.

The imposition of fresh restrictions has come at a particularly inopportune time for many retailers, with Christmas just around the corner.

Under the terms of the current lockdown in England, nonessential places such as pubs, restaurants, hairdressers, golf courses, gyms, swimming pools, entertainment venues and stores selling items like books, clothing and sneakers, must remain closed until at least December 2.

Unlike the U.K.’s spring lockdown, schools and universities in England are remaining open this time, as are construction sites and factories.

The government has responded to the fresh curbs, announcing that its generous salary support scheme, which sees it paying 80 per cent of the salaries of workers retained by firms rather than fired, will be extended through March.

Treasury chief Rishi Sunak acknowledged that the health steps taken in the past few weeks “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,� he said.

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