Gdp

Why did economic growth in August fall flat?

August should have been a relative boom for the British economy: restrictions were the most relaxed since the Covid crisis began. Businesses in the hospitality and leisure industries were largely allowed to reopen by this point, and public transport guidance changed to allow non-essential workers to return to the office. On top of these liberalisations, schemes like Eat Out to Help Out were brought in to encourage – even subsidise – more economic activity. Yet growth figures fell flat, increasing by 2.1 per cent – roughly half of what was expected by economists. It appears economic recovery started to stagnate (down from June’s 9.1 per cent and July’s 6.4 per

Will the economy continue to bounce back?

The UK economy continues to bounce back – but it’s the coming months that could pour cold water on a V-shaped recovery. The economy grew 6.6 per cent in July, according to data from the Office for National Statistics, with the return of pubs, restaurants, hairdressers and more non-essential shops giving us another boost back towards pre-Covid levels. But there’s still a long way to go: despite a record-breaking growth rate between May and July, Britain is still nearly 12 per cent below its GDP level in February 2020, having experienced a record-breaking contraction – the biggest seen in 300 years, and the worst of any major economy during the

Can Britain get its record-high debt under control?

Last month, Britain joined the club of countries whose national debt is greater than 100 per cent of economic output. According to an Office for National Statistics update, public debt exceeded £2 trillion, taking the debt to GDP ratio over 100 per cent for the first time in 60 years. A fast economic recovery will prove vital for getting the Britain’s deficit under control Crossing this mark doesn’t come as much of a surprise given the copious amounts of spending the UK has done on Covid-related policy. July saw the fourth highest borrowing of any month on record – the top three coming in the previous three months when the

Is Britain heading for the worst economic hit in Europe?

It’s odd to read headlines today saying that the UK has officially entered recession. We’ve known this for months: shops were closed, restaurants shuttered. You couldn’t get a cup of coffee or a haircut, offices were closed and millions furloughed. These were not normal times – but we knew that then, as we know it now. What we didn’t know was how far the economy had contracted, and how much this could be remedied by ending lockdown. The big news today, revealed by official figures released by the Office for National Statistics this morning, starts to answer this. It turns out that our economic hit was one of the hardest

Has Sweden been vindicated?

Sweden has released growth figures for the second quarter – a contraction of 8.6 per cent – and two narratives are circulating. The first is that the Swedish experiment has failed spectacularly, resulting in both a higher death toll than its Scandinavian counterparts as well as a collapsed economy. The second is that Sweden has been vindicated, taking a much less severe economic hit than the EU’s average and in a better position to recover as well. Which is the fairer assessment? Sweden has indeed taken an economic beating despite never instigating a full lockdown. Its population’s change in behaviour (adopting social distancing and heading indoors despite this not being

How fast can Britain recover from its economic free-fall?

Putting the UK into lockdown was only going to send growth in one direction: down. While today’s figures from the Office for National Statistics were expected, they nevertheless confirm that the UK has experienced its largest monthly economic contraction on record. The UK economy shrank 20.4 per cent in April. Combined with March’s GDP drop (now the second largest fall since records began), the British economy is a quarter smaller than it was in February. Putting these figures alongside other monthly slumps makes for stark comparison. Hits taken for additional bank holidays and for the pain experienced during the financial crash barely compare to what’s happened in light of the

Ross Clark

Why UK GDP may have fallen by more than a fifth

Is anyone really surprised that GDP fell by 20.4 percent in April? Perhaps we should be. It doesn’t sound high enough to me. We have just been through a great economic experiment in which most shops have been forced to close, all pubs and restaurants been forced to shut their doors and the public ordered to remain indoors except for essential visits. Road traffic at one point was back to 1950s levels. And yet the economy officially shrank only by a fifth – taking it back roughly to the size it was in 2003. I am not sure that these statistics quite pass the smell test. According to the breakdown provided

Is Britain set to be the sick man of Europe?

The global lockdown has seen economies shrink and unemployment soar across the world, pushing governments to borrow at rates never seen in peacetime. On Wednesday, the OECD published country-by-country estimates for the economic hit – and its projections for the UK are some of the worst. Under the scenario of no second wave (that is, assuming countries won’t need to lockdown again this year), Britain’s economic downturn is forecast to be the worst in the G7, and fourth-worst in the OECD, with an 11 per cent fall in annual GDP. In the case of a second wave, prospects still aren’t great: in the G7, Britain’s 14 per cent downturn is on