UK economy stumbles, setting back recovery from slump

LONDON: Britain’s economy struggled to grow in August, setting back its recovery from the coronavirus lockdown, and Finance Minister Rishi Sunak was due to announce more help to slow a rise in jobs losses as a second wave of COVID-19 infections hits.
Gross domestic product rose by 2.1 per cent from July, official data showed, not even half the median forecast in a poll of economists and the slowest increase since the economy began to recover in May from a record slump.
Much of what growth there was in August was down to a one-off government restaurant subsidy programme. Finance Minister Rishi Sunak was due to announce later on Friday a plan to support jobs in businesses that may be ordered to close to slow a resurgence of COVID-19 infections.
Economists said the data also raised the chance of more stimulus from the Bank of England. “The sharp slowdown in growth indicates that the recovery may be running out of steam, with output still well below pre-crisis levels,” Suren Thiru, head of economics at the British Chambers of commerce said.
“The increase in activity in August largely reflects a temporary boost from the economy reopening and government stimulus, including the Eat Out to Help Out Scheme, rather than proof of a sustained ‘V’-shaped recovery.”
More than half of the economy’s growth in August came from accommodation and food, where output surged by 71.4 per cent thanks to the government’s one-month meals subsidies, more people taking holidays in Britain and the easing of lockdown restrictions.
Kate Nicholls, head of the UK Hospitality trade body, said new COVID-19 restrictions introduced in September had weighed on the hospitality sector again. — Reuters