The White Lion Pub in Covent Garden. Cases of Covid-19 in the UK are now doubling every seven to eight days. Prime Minister Boris Johnson is briefly considering national restrictions to short out the virus.
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LONDON – The UK economy grew 2.1% a month in August as the country gradually recovered from the coronavirus crisis, albeit at a slower pace.
The estimated GDP (gross domestic product) growth in August was lower than economists polled by Reuters expect a monthly expansion of 4.6%. This is followed by an expansion of 6.4% in July, 9.1% in June and 2.7% in May, after a record decline of 19.5% in April, according to the National Statistics Office.
The Bureau of National Statistics data on Friday showed GDP remained 9.2% lower in August than in February, before the effects of the pandemic were fully felt.
GDP rose 8% in the three months to August as lockdown measures eased, according to the ONS.
The dominant service sector in the UK grew 2.4% in August, after growing 5.9% in July. This was fueled in large part by food and beverage service industry growth of nearly 70% that the ONS attributed to the easing of restrictions and the government's "Eat Out to Help Out" program.
The country's emergence from lockdown in recent months has paved the way for a recovery in many economic sectors, but Covid-19 cases have grown exponentially in the past few weeks as a second surge appears to be underway.
The UK government has imposed a 10pm. Curfew on bars and restaurants across the UK. Further restrictions are expected in the coming weeks.
As of Friday morning, the UK has confirmed 564,502 cases and 42,682 deaths, according to Johns Hopkins University.
On September 24, UK Treasury Secretary Rishi Sunak announced a new emergency package of unemployment curb measures to replace the country's vacation program, which expires this month.
"A long, difficult winter"
"With recent polls pointing to a slowdown in September activity and the potential for more and more stringent localized activity restrictions, doubts are growing as to whether the recovery can continue into the final quarter of the year," said Dean Turner, economist for UBS Wealth Management said Friday.
"Slow progress should encourage the Bank of England to step up its bond purchase (QE) program at its November meeting."
Since the outbreak of the pandemic, the central bank has cut its base rate twice from 0.75% to 0.1% and launched an asset purchase program of £ 745 billion ($ 964.6 billion) to prop up the economy .
"While the Bank of England is showing positive signs that growth will return to pre-pandemic levels before Christmas, this is far from complete," said Tom Stevenson, investment director, private investments at Fidelity International.
"The vacation program ends this month and there is a real risk that the fear of unemployment will create a negative precautionary savings feedback loop and dampen consumer confidence."
With the prospect of more localized lockdowns on Monday, Stevenson said the country was preparing for "a long, difficult winter".