UK Economy Recovers From Major Crash, Grows At Slow Pace: ONS

Finance Minister Rishi Sunak welcomes the GDP figures but adds that people are rightly worried about the coming months

Britain’s economy recovered half of its COVID-19 crash by the end of July, helped by pubs and restaurants reopening from lockdown, but the bounce-back is expected to slow as job losses mount and Brexit tensions rise.

After shrinking by a record 20% in the second quarter, output expanded by 6.6% in July, slower than June’s monthly rate, the Office for National Statistics (ONS) said on Friday. Economists polled by Reuters had expected growth of 6.7%.

Finance Minister Rishi Sunak welcomed the gross domestic product (GDP) figures but added that people were rightly worried about the coming months.

The economy remains 12% smaller than its level in February before the pandemic hit Britain.

“July was probably the last of the big step-up inactivity and a full recovery probably won’t be achieved until early 2022,” Thomas Pugh, an economist with Capital Economics, said.

In response, the Bank of England (BoE) was likely to ramp up its bond-buying stimulus program by a third, or 250 billion pounds ($320 billion), Pugh said.

Britain’s economy suffered the sharpest second-quarter fall of any Group of Seven nations in the April-June period.

Hopes for a swift rebound have faded as businesses struggle to cope with social distancing rules and many people remain reluctant to travel on public transport or go to crowded places.