Britain’s economy is growing as expected, with gross domestic product rising 4.8 percent in the second quarter of the previous month, up 22.2 percent year-on-year, according to the first estimate released by the Statistics Office on Thursday. The economy shrank 1.6 percent on-quarter in the first three months of the year, compared to 6.1 percent a year earlier. Sterling has not changed much since the release, as the result also means the central bank will not need to intervene or change its policy, although analysts have expected UK economic growth to slow in the third quarter.
It is very likely that the growth rate has reached its peak
Stuart Cole, chief macroeconomist at Equiti Capital in London, wrote in a note to clients about the stats.
Regarding GDP data, Samuel Tombs, Pantheon Macroeconomics Economist, noted that among the world’s seven largest (G7) economies, the UK was clearly the hardest hit by the coronavirus pandemic, largely due to Low personal consumption due to the long shutdown. .
British households spent 7 per cent less in the second quarter than in the last three months of 2019, but thanks to the gradual opening, consumption jumped 7.3 per cent on a quarterly basis between April and June.
Incidentally, the latter has been the most contributor to GDP growth, with investment continuing to decline despite increased business investment. However, the economy was negatively affected by foreign trade, as imports grew at a faster rate than exports.
June was the first full month in which closed rooms for most restaurants also opened. As a result, as well as the health sector, economic growth was faster than expected at 1 percent in June, compared to a Reuters forecast of 0.8 percent.
The services sector expanded by 1.5 percent, while industrial production fell by 0.7 percent and construction production fell by 1.3 percent this month.
UK gross domestic product shrank by about 10 per cent last year and the Bank of England expects it will not reach pre-pandemic levels until the end of the year. In contrast, the United States, for example, has already covered the backlog. The International Monetary Fund (IMF) expects the same seven percent growth for both countries for the full year.
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