Britain's GDP growth interrupt amidst Covid surge

As per to the economic prospect, Smith said that the fourth quarter will be a bigger test for the economy

The Office for National Statistics (ONS) has stated that Britain's gross domestic product (GDP) is expected to have grown only by 0.1 percent monthly in July, 2.1 percent lower than its pre-pandemic level in February 2020, .

 

The news agency Xinhua quoted the ONS as saying on Friday, the service output remained broadly lower in July following the strong growth of 1.5 percent in June, whereas output in the production sector rose by 1.2 percent and the construction sector fell by 1.6 percent.

 

A developed markets economist at financial services firm ING, James Smith said that the summer slowly ends, there's little doubt that the UK recovery has stalled since our last monthly economic update in July.

 

Smith said the spread of the Delta variant of Covid-19 and the high rates of self-isolation that only served to expand the staff shortages being reported in various corners of the UK jobs market and PMIs have decline from recent highs.

 

Smith added that the third wave of the coronavirus pandemic in Britain has interrupt the recovery, but hasn't so far weaken the consumer confidence dramatically.

 

An economist, Paul Dales at the Capital Economics UK, an economic research consultancy based in London, said, "The surge in Covid-19 cases and the product/labour shortages are probably behind the stalling in the UK's economic recovery in July."

 

Dales added that in next week's CPI release set to reveal a rise in inflation from 2 percent to around 3.1 percent, there is a niff of stagflation in the air.

 

As per to the economic prospect, Smith said that the fourth quarter will be a bigger test for the economy.

 

He said that the fourth quarter is more of an unknown and the positive news from recent weeks is that hospitalisations have stayed comparatively low, that suggested, covid vaccines will help avoid a lockdown in the country this winter.

India Scanner News Network

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