LONDON (AP) — The British economic system is not the worst performing Group of Seven economic system after second quarter progress was revised greater Thursday to replicate a much bigger than foreseen enhance in shopper spending following the lifting of lockdown restrictions.
Nonetheless, there are rising considerations that the restoration will lose momentum over the approaching months because of a scarcity of truck drivers, evidenced over the previous few days by lengthy traces outdoors filling stations.
The Workplace for Nationwide Statistics stated the U.Okay.’s financial output elevated by 5.5% within the April to June interval from the earlier quarter, up on the earlier estimate of 4.8%. The company stated the economic system additionally contracted by lower than thought within the first quarter — 1.4% towards 1.6%.
The adjustments imply that the British economic system has gotten nearer to clawing again the 9.7% shrinkage it skilled final 12 months after the coronavirus pandemic struck and prompted widespread curbs on on a regular basis life. On the finish of the second quarter, the economic system was 3.3% smaller than it was on the finish of 2019, the final full quarter earlier than the pandemic had an impression.
Samuel Tombs, chief U.Okay. economist at Pantheon Macroeconomics, stated the upgrades imply the British economic system is “not the laggard” among the many Group of Seven main industrial nations.
On account of Thursday’s upgrades, the U.Okay. has leapfrogged Italy, which stays 3.8% smaller than earlier than the pandemic. Its shortfall is similar with Germany’s and simply worse than France’s 3.2%. Of the seven main industrial nations, solely the U.S. has an economic system larger than it was earlier than the pandemic.
The most important driver of Britain’s upward revision within the second quarter was family spending, which contributed 4 proportion factors of the 5.5% enhance. The nation’s pandemic restrictions have been eased in April to permit out of doors and lifted in Could.
The hard-hit hospitality sector did significantly properly, benefiting farther from the rescheduling of soccer’s 2020 European Championship, which noticed England advance to the ultimate.
Although latest surveys counsel that progress has slowed for the reason that finish of the second quarter, there are hopes that the economic system could also be again at its pre-pandemic stage by the tip of 2021 or early subsequent 12 months.
Economists cautioned that the British economic system faces a lot of headwinds this fall.
One of many important worries is that latest provide chain points, that are partly blamed on labor shortages associated to Britain’s departure from the European Union, might actually impression on progress. The issues confronting the economic system have been significantly evident over the previous week. A scarcity of truck drivers, tens of hundreds of whom left the U.Okay. after Brexit, led to panic-buying of gas and lengthy traces at filling stations.
One other concern isthat Thursday’s ending of an 18-month authorities wage assist program might result in massive will increase in unemployment at a time when many households are battling surging family payments, notably of vitality.
Comply with AP’s pandemic protection at https://apnews.com/hub/coronavirus-pandemic