A man wearing a face mask or covering due to the Covid-19 epidemic walks behind a statue of the Beatles in Liverpool, north-west England, on October 2, 2020.
Oli ScarfF | AFP | Getty Images
According to preliminary data released on Thursday, the UK economy grew 15.5% in the third quarter as it began to bounce back from a sharp recession.
Economists surveyed by Reuters had expected quarter-on-quarter expansion in GDP (gross domestic product) in the three months to September. It comes after an unprecedented 19.8% dip in the previous quarter as nationwide lockdown activities waned.
The rise in the third quarter marks the UK’s sharpest quarterly expansion since records began in 1955, but GDP is still below 9.7% where it was at the end of 2019, the National Statistics Office said on Thursday. Compared to the third quarter of last year, GDP is down 9.6%.
Monthly growth slowed in the third quarter. According to the ONS, GDP grew .3..3% in July, fell to 7.5% in August and 1.1% in September, while according to the ONS, it was driven by commercial, scientific and technological industries.
However, in England now amid a resurgence in coronavirus cases with at least a one-month partial lockdown until 2 December, the recovery is expected to lose steam in the last three months of the year.
The deadline for the UK and the EU to reach an agreement on their post-Brexit trade relationship is also fast approaching, with the “not-deal” scenario at the end of the year, likely to lead to further economic disruption.
‘Keep champagne on ice for now’
UK Finance Minister Shi Sunak recently announced an increase in the country’s furlough plan by the end of March to offset a sudden rise in unemployment, while the Bank of England raised its asset purchase target stock to 5 5,895 billion (૨ 1.5 trillion). ). The central bank estimates contraction at 11% during the year.
“The recovery in the economy is clearly positive, but we should keep the champagne on ice for now,” said Laith Khalaf, a financial analyst at investment platform AJ Bell. Bell’s financial analyst Laith Khalaf said.
“The out-of-help-out scheme was turbo-charged over the summer boom, while the furlough scheme worked its magic by wrapping up unemployment.”
Khalaf suggested that the real “litmus test” would be how quickly the economy could return to epidemic levels, and although the news of Pfizer’s vaccine success gave industry hope, unemployment and bankruptcy were likely to increase during the winter. Failed Brexit talks could also give the economy “helpless pressure in the wrong direction.”
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