The Office for National Statistics (ONS) has announced that the UK economy grew by a record 15.5% in the third quarter but remains 8.2% smaller than before the pandemic.
The data from the ONS showed Gross Domestic Product (GDP) bounced back strongly in the July-September period after the pandemic-induced recession in the first half of the year.
It also revealed the pace of growth has however “started to slow after a boost from the Eat Out to Help Out scheme and summer staycations faded – and hopes for a ‘V-shaped recovery’ have been dashed after the announcement of a new lockdown.”
The GDP is expected to plunge again in the final quarter of 2020 after the Bank of England announced earlier that it expects growth to contract by 11% overall, when it downgraded its outlook for the UK’s economic performance.
There are hopes that a new vaccine could see the economy return to pre-COVID levels more quickly than previously expected.
UK’s Chancellor of the Exchequer, Rishi Sunak, said, “Today’s figures show that our economy was recovering over the summer, but started to slow going into autumn.
“The steps we’ve had to take since to halt the spread of the virus mean growth has likely slowed further since then.
“But there are reasons to be cautiously optimistic on the health side – including promising news on tests and vaccines.
“There are still hard times ahead, but we will continue to support people through this and ensure nobody is left without hope or opportunity.”
Britain’s third quarter growth figure was the highest since quarterly records began in 1955 yet fell slightly short of the expectations of economists who had on average predicted an expansion closer to 16%.
A monthly breakdown of the data also showed that the pace of recovery from the recession was slowing.
After lockdown measures were eased, GDP rose by 6.3% in July but growth slowed to 2.2% in August and just 1.1% in September.
The ONS said all the main sectors of the UK economy posted record growth in the third quarter though they remained below pre-COVID levels.
In September, there was a boost for education as children went back to school and house building continued to recover.
“However, pubs and restaurants saw less business, after the Eat Out to Help Out scheme ended, and accommodation saw less business after a successful summer,” said Jonathan Athow, ONS Deputy National Statistician for Economic Statistics.
The ONS added that the pickup in business investment has been much weaker than private consumption.
The Bank of England (BoE) announced it has expanded its ‘virus crisis support’ by £150bn and kept interest rates unchanged at a record low of 0.1% whiles increasing its purchases of UK government bonds to £875 billion ($1.1 trillion) as it prepares for economic damage from new coronavirus lockdowns.
Other countries including the US have also reported record growth in the third quarter as they recover from recession while also remaining below pre-pandemic levels.
