According to official data, Britain’s economic boom in the second quarter was faster than before as spending increased after the lockdown was lifted.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 5.5 percent between April and June, which was revised up from an initial estimate of 4.8 percent.
The ONS said this means GDP was down 3.3 per cent where it was before the pandemic in the last quarter of 2019, from 4.4 per cent previously estimated.
The biggest driver of the upward GDP revision was household spending, which contributed four percentage points of growth to 5.5 per cent as restrictions to allow outdoor dining were eased in April, with further restrictions lifted in May.
While demand slowed after the lockdown in early 2021, Britons ramped up their spending, with recent GDP figures showing a marked slowdown in the recovery of growth.
Data from earlier this month showed economic growth slowed to 0.1 per cent in July from 1.4 per cent in June, and fears that supply chain problems are hindering recovery.
Martin Beck, senior economic adviser at EY Item Club, said: “Barriers to growth from supply disruptions, negative impact on household spending power, rising inflation and sentiment from energy prices mean the recovery looks more fragile. “
However, he added that with job vacancies at record levels, booming lending conditions and healthy household finances, “the recovery from running out of support goes a long way.”
ONS data showed healthcare and the arts sector outperformed initially, with households saving less and spending more as the economy opened up.
Jonathan Atho, deputy national statistician at the ONS, said: “Household savings fell strongly in the latest quarter, especially from record highs seen during the pandemic, as many people were able to spend again on shopping, eating out and driving their cars.” Were. “
The ONS said its revisions came after “several improvements to sources and methods” with more complete data from the health sector.
In the quarterly national accounts, the ONS also revised the first quarter figures for 2021, estimating that the economy now contracted a better 1.4 per cent, from 1.6 per cent earlier.
It said the economy contracted by a record 9.7 per cent in 2020, with a fall of 9.8 per cent previously estimated.
The latest data shows household spending jumped 7.9 per cent in the second quarter, while the savings ratio fell from 18.4 per cent in the first three months of 2021 to 11.7 per cent, the second highest on record.
The data showed the extent of the rebound in the hard-hit hospitality sector as restrictions were lifted and thanks to a boost from the Euro 2020 football tournament, housing and food services output grew 87.6 percent in the quarter.
However, many sectors are being held back by the current supply chain crisis and lorry driver shortages, while there are concerns that rising inflation will drive consumers to rein in their spending.
The Bank of England recently lowered its expectations for third-quarter growth to 2.1 percent from a forecast of 2.9 percent in August, partly blaming a more pessimistic outlook on supply chain issues and labor shortages.
Separately, ONS figures also show the UK’s current account deficit – a measure of the country’s balance of payments with the rest of the world – narrowed slightly to £8.6 billion ($11.7 billion) in the second quarter from a revised £8.9 billion Gaya. $12.2 billion) over the past three months.
Excluding volatile precious metals, the deficit widened to £10.2 billion ($13.9 billion) in the second quarter – or 1.8 per cent of GDP – due to a collapse in Britain’s trade balance and lower return on foreign investment.
by Holly Williams
This News Originally From – The Epoch Times