Rolling coverage of the latest economic and financial news
- BREAKING: UK GDP rose just 0.1% in July
- Service sector and manufacturing stalled
- Capital Economics: rising virus cases and shortages stall recovery
- ONS: staff shortages a factor
- Construction output fell as firms struggle to source raw materials
- Introduction: UK’s July GDP report
Britain’s economic recovery from the winter lockdown virtually stalled in July despite the removal of most pandemic restrictions, amid a fall in retail sales and the impact of ‘pingdemic’ shortages in the workforce.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by only 0.1% in July from a month earlier, as the government’s end to most restrictions in England failed to offset the fallout from the coronavirus Delta variant.
UK economic recovery stalled in July amid worker shortages https://t.co/9VsLs066EE
Economist Julian Jessop points out that the end of lockdown restrictions in England in mid-July didn’t deliver a bounce...and may even have dampened consumer spending.
Four quick points on the weak UK #GDP data in July...
1. Partly reflects renewed consumer caution over #Covid (consumer-facing services fell 0.3%). Initial impact of 'Freedom Day' may even have been negative. This at least should be temporary (August surveys reassuring)... (1/4)
2. Also problems on the supply side. Some of these will be temporary too - notably the #pingdemic and tying up of workers on #furlough. Others are global and likely to be longer lasting, though markets will be able to fix these over time. (2/4)
3. Beware attempts to pin weak UK #GDP on #Brexit. Others in Europe, and the US, are facing similar problems. Unfortunately, they don't publish monthly GDP data. But on other indicators, e.g. #retail sales, car production, #construction, they were doing at least as badly. (3/4) pic.twitter.com/4Qwa983QY0
4. Overall, July #GDP was disappointing, but should only be a pause before a renewed acceleration. Labour market still bouyant, and there's plenty of scope for more spending by both consumers (high savings) and businesses. Relative flexibility of UK economy should help too. (4/4)
Continue reading...from The Guardian https://ift.tt/3zViKXf
No comments:
Post a Comment