Economy picks up as Covid restrictions end but supply chain woes take a toll

The ONS said gross domestic product rose 0.4% in August, but downwardly revised its estimate for July to a 0.1% contraction.

Festivalgoers
Festivalgoers

Britain’s economy grew in August as the full lifting of coronavirus restrictions boosted events and hospitality, but official figures revealed a contraction in July.

The Office for National Statistics (ONS) said gross domestic product (GDP) rose 0.4% between July and August.

The data showed further signs of a slowdown in the UK’s recovery from the pandemic as global supply chain woes take their toll, with the August figure lower than expected, while the ONS also downwardly revised its estimate for July to a contraction of 0.1% from 0.1% expansion previously.

The economy would also need to soar by 2.1% in September to remain on track with the Bank of England’s forecast for overall growth of 2.1% in the third quarter.

Darren Morgan, director of economic statistics at the ONS, said: “The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England.

“This was offset by falls in health activity, with fewer people visiting GPs and less testing and tracing.

“However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July.”

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