Britain’s economic recovery lost momentum over the northern summer despite the widespread lifting of restrictions on coronaviruses as supply chain issues wreaked havoc, official figures show.
While the Office of National Statistics said the economy saw modest growth in August, with bars, restaurants and festivals enjoying England’s first full month without coronavirus restrictions, the increase of 0.4 % was slightly lower than expected.
The agency also downgraded July’s figure from 0.1% growth to down 0.1% due to weaker data from a number of industries, underscoring the choppy nature of the economic recovery.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said weakness “is seeping” into the numbers, particularly in the construction sector, which has now recorded four straight months of negative growth.
The UK economy remains 0.8% below its level before the coronavirus pandemic of February 2020.
The International Monetary Fund forecast on Tuesday that the UK will grow 6.8% this year, more than any other industrialized country in the Group of Seven, and 5% next year. However, the UK economy experienced the worst recession of the seven in 2020, with a 9.8% contraction in its output.
With inflation expected to reach 4% in the coming months against a backdrop of rising energy bills, low productivity levels, rising taxes and an uncertain COVID backdrop as winter approaches, there are concerns that the economy will underperform in the coming months.