UK Economy Continues Growth In June Helped By Diners And Doctors

Economic growth in Britain in June was faster than expected at 1 per cent as the month also marked the first full month of indoor service for many hospitality firms. The growth was fuelled by the healthcare sector where a rise in due to a rise in routine medical checkups was witnessed following a let up in the Covid-19 pandemic.

However, the gross domestic product of Britain was still 2.2 per cent smaller compared to what it was just prior to the pandemic struck the country, according to the official data. This reflected the deep impact the pandemic and lockdowns linked to it has had on the economy last year.  

There was an almost 10 per cent drop in the British economy in 2020 which was among the largest declines among the richer countries. Predictions of the Bank of England say that a complete recovery of the economy to pre-pandemic levels for the country would be possible only at the end of 2021.

The pandemic slump has already been overcome by the American economy.

The impact of a surge in coronavirus cases in July is yet to get reflected in the GDP figures even though other data published on Thursday showed a rise in consumer spending in the week to Aug. 5 and was very close to the levels of February 2020, the month prior to the pandemic related lockdowns were imposed.

The month-on-month growth for the overall economy in June was stronger than the 0.8 per cent growth predicted by analysts.

As long as there was no return to lockdowns, there would be a building up of confidence among consumers and businesses over time, said Sandra Horsfield, an economist with Investec.

“How smooth the transition will be is the big unknown, with perhaps the biggest question marks hanging over the performance of the labour market once the furlough scheme fully ends in late September,” she said.

The government had no plans of extending the furlough programme implemented during the pandemic to protect the incomes of millions of workers, reiterated Finance minister Rishi Sunak on Thursday.

The Office for National Statistics said that there was a 1.5 per cent growth in the huge services sector of Britain in June. The highest growth was accounted for during the month by the healthcare sector with more visits of regular patients to family doctors with an easing of the pandemic restrictions.

There was a more than 10 per cent jump in the output from food and beverage services such as pubs and restaurants which was partly because of the Euro 2020 soccer tournament.

There was however a decline of 0.7 per cent in industrial output in June as factories were hit by maintenance of oil field production sites and a swing in the volatile pharmaceutical industry.

The ONS said economic output was up by 4.8 per cent compared with the first quarter of this year when much of Britain’s economy was in the grip of a third lockdown.

(Adapted from Reuters.com)



Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability

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