LONDON: Britain’s economic recovery almost ground to a halt in October as a surge in coronavirus cases hammered the hospitality sector, adding to the chances that the economy will shrink over the final three months of 2020.
Thursday’s official data showed the economy lost momentum as public authorities in much of the United Kingdom barred people from socialising in pubs and restaurants, ahead of a broader four-week partial lockdown across England in November. Gross domestic product rose 0.4 per cent in October after expanding 1.1 per cent in September, the Office for National Statistics said, the weakest growth since output collapsed in April during the first lockdown.
A limited rollout of a COVID vaccine began this week in Britain, offering hope for a rebound in consumer spending in 2021. But many businesses will face new headwinds from trade restrictions with the European Union that come into force on Jan. 1 when post-Brexit transition arrangements end. Prime Minister Boris Johnson and the EU’s chief executive, Ursula von der Leyen, have given themselves until Sunday to seal a new trade pact that would limit some of the damage, after failing to overcome persistent rifts at a meeting on Wednesday.
“The economy continued to grow in October, but at a snail’s pace. And with the COVID-19 restrictions likely to remain in place for some time, the economy is in for a difficult few months yet,” Ruth Gregory, economist at Capital Economics said. Britain has Europe’s highest death toll from COVID-19, with more than 62,000 fatalities, and also suffered the biggest economic hit of any major economy after GDP shrank by an unprecedented 19.8 per cent in the second quarter of this year. — Reuters
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