UK economy still 7.9% below pre-pandemic level as growth slows


The UK economy grew by just 0.4% in October as the recovery from the coronavirus crisis slowed even before latest lockdown measures.

Figures from the Office for National Statistics (ONS) showed GDP expanded for the sixth month in a row but remained 7.9% below its February pre-pandemic level.

Britain experienced its steepest recession on record earlier this year as coronavirus restrictions crushed economic activity.

It is widely expected to go into reverse again in the current fourth quarter after rules were tightened again.

Britain’s fiscal watchdog expects a recovery in 2021 but has warned this will be held back if the Brexit transition period ends without a deal with the EU.

The pace of growth in October was down from 1.1% in September and was the weakest it has been since the economy started its recovery from the slump.

GDP is expected to have shrunk again in November pulling the economy into a double-dip downturn.

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In response to the latest figures, chancellor Rishi Sunak issued a statement making reference to the government’s “unprecedented package of support” to protect jobs which he said would “ensure nobody is left without hope or opportunity”.

The ONS said October’s data came against a “backdrop of further national measures” introduced in response to a second wave of COVID-19.

Jonathan Athow, ONS deputy national statistician for economic statistics, said the month saw strong growth in retail as well as recovery in car manufacturing.

“However, the reintroduction of some restrictions saw services growth hit, with large falls in hospitality, meaning the economy overall grew only modestly,” Mr Athow said.

The Office for Budget Responsibility (OBR) expects the economy to shrink by 11.3% this year – its biggest decline for more than 300 years – before growing by 5.5% in 2021.

However the OBR expects the recovery to be held back if there is a no-deal Brexit.

Ruth Gregory, senior UK economist at Capital Economics, said: “The economy continued to grow in October, but at a snail’s pace.

“And with the COVID-19 restrictions likely to remain in place for some time, the economy is in for a difficult few months yet.

“But scope for a decent “vaccine bounce” next year should allow the economy to regain its pre-pandemic level in early 2022.”

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