London (AFP) – Resume Britain’s economic growth In August, it reached 0.4%, especially in the tourism, restaurant and entertainment sectors, thanks to the lifting of all health restrictions related to the epidemic.
GDP growth has benefited in particular from services provided directly to consumers such as tourism, which has been hit particularly hard by the pandemic and the long months of lockdown.
The Office for National Statistics said in its monthly report today, Wednesday, that “the hotel, food services, arts and entertainment sector was the largest contributor to the services activity in August.”
But gross domestic product remains 0.8 percent below its level before the epidemic, the bureau said.
The July figures were revised, while maintaining the contraction rate of 0.1%, compared to an increase of 0.1% that was originally published. This revision is due to a decline in vehicle manufacturing than expected, but also oil and gas due to maintenance period in infrastructure and the calculation of activity in the health sector.
The construction sector recorded a contraction, and its production remains 1.5 percent less than its level before the epidemic.
As for the manufacturing sector, which is also suffering from a shortage of manpower, semiconductors and equipment due to a global logistical crisis and the consequences of Britain’s exit from the European Union, it is the sector in which the delay remains the highest compared to before the epidemic, according to data from the Statistics Office.
lack of supplies
Supply problems in Britain, especially in August, led to a 27% drop in car production due to the global shortage of semiconductors.
The shortage of truck drivers, which the sector estimated at about one hundred thousand, several months ago led to a shortage of stores that exacerbated in the past weeks and now affects gas stations and threatens the performance of stores before Christmas.
The British economy is also facing a price hike that could reach 4% inflation by the end of the year, more than twice the Bank of England’s target, with especially high electricity bills due to record prices for natural gas.
For September, IHS Markit’s main BMI Flash Composite Index fell to a seven-month low.
“GDP in August demonstrated decent growth while the country was recovering (after months of the pandemic-related lockdown) and despite the supply chain crisis and labor shortage, but the overall performance was mixed,” said Yael Selvin, an economist at KPMG.
“The prospect of higher costs, more disruption (in supply) and a possible winter wave of coronavirus cases could threaten the fragile economic recovery,” she added.
However, the labor market appears resilient for the time being, as the unemployment rate, which continued to decline in the three months ending in the end of August, reached 4.5 percent. It remains to be seen the potential impact of ending massive employment aid provided by the government to help businesses in the face of the pandemic, including a major underemployment program that ended at the end of September.
For his part, Chancellor of the Exchequer Rishi Sunak on Wednesday welcomed “the recovery that continues with a record number of paid employees and the growth prospects for Britain faster this year than the Group of Seven.”
The International Monetary Fund has just cut its growth forecast for Britain for 2021 to 6.8% from 7%.
The strong recovery of British activity can be compared with the extent to which GDP fell last year due to the epidemic, and it was the most severe among the G7 countries (-9.8%) after Britain witnessed many months of tight closure.
Britain is among the European countries with the highest death toll due to the epidemic, reaching 138,000.