Britain’s economy grew by more than previously thought in the April-June period, official data showed on Thursday, before what looks like a sharp slowdown more recently as bottlenecks in the economy, including a shortage of truck drivers, mount.
Gross domestic product increased by 5.5 per cent in the second quarter, the Office for National Statistics said, compared with its preliminary estimate of growth of 4.8 per cent.
The ONS said the data had been adjusted to take into account of more complete data from the health sector as well as an update of its sources and methodology for calculating British economic output.
The figures provided a more complete picture of Britain’s swift economic bounce-back from its coronavirus lockdown earlier this year, but there are signs of a loss of momentum more recently due to post-pandemic shortages of supplies and staff.
On Wednesday, Bank of England Governor Andrew Bailey said he thought the economy would regain its pre-pandemic level of output in early 2022 - a month or two later than the BoE had forecast in August.
Thursday’s data showed households increased their spending by almost 8 per cent in the April-June period and they dipped into their coronavirus lockdown savings to fund it.
The savings ratio, which measures the income households saved as a proportion of their total available disposable income, fell to 11.7 per cent from 18.4 per cent in the first quarter of 2020, the ONS said.
GDP growth was driven by the services sector, especially in the accommodation and food industry where output rose by 87.6 per cent in quarterly terms as it reopened from lockdown.
Manufacturing output rose by 1.8 per cent in the second quarter, despite a shortage of microchips hurting car production. Food and beverage manufacturing performed strongly.
The ONS said construction output had broadly returned to its pre-pandemic level. – Reuters