UK economy grows 0.6% in September after a weak summer

The UK economy grew 0.6% in September, but estimates for the previous months were revised downward so GDP was 0.6% lower than in February 2020, just before the country launched its first COVID-19 lockdown .

The data painted the picture of an economy losing momentum after the lockdown due to global supply chain problems and corporate caution.

Economists polled by Reuters had forecast monthly GDP growth of 0.4% for September.

The Bureau of National Statistics said GDP fell 0.2% in July, a decline more than a previously estimated 0.1% decline, while production rose only 0.2% in August, weaker than originally reported 0.4%.

“Although monthly production has rebounded over the quarter since the decline in July, this is more of a temporary boost from the easing of restrictions than a significant improvement,” said Suren Thiru, head of the UK Chamber of Commerce’s economics department.

September growth was aided by stronger production in the health sector as people returned to see their doctors after falling during the pandemic, causing the services sector to grow 0.7% from August.

However, industrial production fell 0.4% as gas distribution contracted for the fourth straight month.

In the third quarter as a whole, GDP grew 1.3%, the weakest three-month growth since the UK lockdown in early 2021. The Bank of England and the Reuters economist survey had forecast growth of 1.5%.

The world’s fifth largest economy contracted nearly 10% in 2020, but the International Monetary Fund predicts that it will see the fastest expansion of any Group of Seven countries in 2021, when growth of 6.8% was expected.

However, the rapid recovery from the spring lockdown gave way to slower growth in the summer due to a combination of rising COVID-19 cases, global supply chain issues and the shortage of some post-Brexit workers.

The BoE said last week, while keeping rates unchanged, that recent economic growth has been weaker than expected and will keep a close eye on the state of the labor market after the government’s health and safety program ended on October 1.

Separate data showed that the UK’s goods trade deficit widened by £ 9 billion to £ 42.3 billion in the third quarter, driven by rising imports from EU and non-EU countries while exports fell – particularly to non-EU countries. Countries.