According to official figures, the UK economic recovery was faster than initially thought in the second quarter as spending surged after the blockade was lifted.
According to the National Bureau of Statistics of China (ONS), gross domestic product (GDP) increased 5.5% from April to June after being revised upward from the initial estimate of 4.8%.
According to ONS, this means that GDP was 3.3% below GDP in the final quarter of 2019 before the pandemic. This is against the previous estimate of 4.4%.
Household spending was the main driver of the upward revision of GDP, contributing 4 points to a 5.5% increase as restrictions on allowing outdoor dining were relaxed in April and further restricted in May. bottom.
The stagnation of demand after the blockade in early 2021 has increased spending by the British, but recent GDP figures show that the recovery in growth has slowed significantly.
Earlier this month, figures show that July’s economic growth fell from 1.4% in June to 0.1%, and there are concerns that supply chain problems may further hinder recovery.
“The headwinds for growth due to supply disruptions, the negative impact on household purchasing power, the sentiment of rising inflation, and energy prices mean that recovery looks more vulnerable,” said Martin Beck, senior economic adviser to EY Item Club. Said.
But he said of record-level job vacancies, strong lending conditions, and household health, “recovery is a long way to go before the support runs out.”
ONS data show that as the economy opens, household savings and spending increase, the performance of the medical services and arts sector is better than initially thought.
Jonathan Ato, Deputy Director of the National Bureau of Statistics of ONS, said: “
ONS added that the revision came after “many improvements to sources and methods” and also included more complete data from the health sector.
In quarterly national accounts, ONS also revised its figures for the first quarter of 2021 and estimates that the economy was down 1.4% from its previous 1.6%, compared to what it was initially afraid of.
He added that the economy shrank by a record 9.7% in 2020 and was previously estimated to have fallen by 9.8%.
According to the latest data, household spending increased by 7.9% in the second quarter, but the savings rate fell from 18.4% in the first three months of 2021 to 11.7%, the second highest ever.
The figures show the extent to which the hospitality sector has been hit by the lifting of restrictions and a 87.6% surge in accommodation and food service production in the fourth quarter, thanks to a boost from the Euro 2020 football tournament. Shown.
However, there are concerns that the current supply chain crisis and the shortage of truck drivers are curbing many sectors, and that rising inflation may curb consumer spending.
The Bank of England recently lowered its third-quarter growth forecast in August from the previously forecast of 2.9% to 2.1%. It partially condemns supply chain issues and pessimistic views on labor shortages.
Separately, ONS figures show that the UK’s balance of payments deficit (a measure of the country’s balance of payments) was revised from £ 8.9 billion (corrected £ 8.9 billion) to £ 8.6 billion (11.7 billion) in the second quarter. It also shows that it has shrunk slightly to (dollars). $ 12.2 billion in the last three months).
Excluding volatile precious metals, the second quarter deficit expanded to £ 10.2 billion ($ 13.9 billion). This is equivalent to 1.8% of GDP due to the weakening of the UK’s trade balance and the decline in foreign investment returns.
Holly Williams
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