UK economy grew by just 0.4% in October but remains 7.9% below pre-pandemic levels, latest figures show, as industry bosses warn it won’t fully recover until the END of 2022
- UK economy has grown for six months running according to official statistics
- Office for National Statistics says it has grown by 23.4% since spring recession
- Gross domestic product expected to go into reverse due to second lockdown
The UK economy grew by just 0.4% in October but remains 7.9% below pre-pandemic, the latest figures show, as industry figures warn Britain won’t fully recover until the end of 2022.
The Office for National Statistics (ONS) said the economy has now grown for six months running, recovering by 23.4% since the low-point of the recession during the spring lockdown.
But Britain could take two years to fully recover from the impact of the coronavirus pandemic, industry experts have warned.
It comes as unemployment is set to peak at 2.51 million people, or 7.3% of the workforce, in the second quarter of next year, once furlough ends.
Britain’s economy remains nearly eight per cent below pre-pandemic levels, with unemployment set to rise to 2.51million people in the second quarter of next year, experts warn
Britain’s economy is unlikely to return to its pre-COVID size until the end of 2022, and unemployment looks set to rise sharply in the first half of next year, the Confederation of British Industry warned on Thursday.
The CBI estimated Britain’s economy would shrink by a record 11.1% this year as a result of the coronavirus, before growing 6.0% next year and 5.2% over the course of 2022.
Unemployment is set to peak at 2.51 million people, or 7.3% of the workforce, in the second quarter of next year after the end of a government furlough programme.
Chancellor Rishi Sunak acknowledged people would be ‘worried’ about the coming winter months following the latest figures on the health of the economy.
He said: ‘Our unprecedented package of support has protected more than 12 million jobs and millions of businesses across the UK – and we have provided the NHS with all the resources needed to halt the spread of the virus, including £6 billion to ensure the UK was the first country in the world to roll out a vaccine.
‘I know people are worried about the winter months but we will continue to support people through our Plan for Jobs to ensure nobody is left without hope or opportunity.’
Growth has slowed in recent months but does continue after GDP plummeted at the start of the national lockdown earlier this year
All sectors have lost momentum since starting to recover in May following the initial lockdown
Gross domestic product (GDP) has still not fully made up the mammoth 25.3% fall seen during the first and second quarters of 2020.
Manufacturing saw the largest contribution to GDP in October, along with health, but food services caused a large drag on growth due to the introduction of tiered Covid-19 restrictions.
Experts also expect GDP to go back into reverse in the final quarter after the impact of the second national lockdown in England.
‘We simply must find new ways to get businesses investing at the start of 2021 if we are to fast-forward the recovery,’ said Tony Danker, the CBI’s new director-general.
Accommodation and food services caused a large drag in the growth of of Britain’s GDP, as the country felt the impact of tiered Covid-19 restrictions
The CBI estimated Britain’s economy could take two years to recover – after shrinking by a record 11.1% this year as a result of the coronavirus, before growing 6.0% next year and 5.2% over the course of 2022
The CBI’s growth forecasts are broadly in line with those from the government’s Office for Budget Responsibility last month, which also predicted a slow recovery as Britain faces added challenges when a post-Brexit transition ends on Jan. 1.
The CBI said that even if Prime Minister Boris Johnson agrees a trade deal with the EU to avoid tariffs, the government would have work to do to give clear guidance to businesses, and to ensure border arrangements ran smoothly and that there was temporary flexibility on issues such as EU data rules.
‘The government need to demonstrate the same agility and resource allocation as they did with COVID,’ Danker said.