Posted on Wednesday October 13, 2021 | 02:10
Updated 8 minutes ago
LONDON (AP) – Britain’s economic recovery lost momentum over the summer despite the widespread lifting of coronavirus restrictions as supply chain problems took their toll, official figures showed on Wednesday.
While the Office of National Statistics said the economy saw modest growth in August, with bars, restaurants and festivals enjoying England’s first full month without coronavirus restrictions, the increase of 0.4 % was slightly lower than expected.
The agency also downgraded July’s figure from 0.1% growth to down 0.1% on weaker data from a number of industries, underscoring the choppy nature of the recovery. economic.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said weakness “is seeping” into the numbers, particularly in the construction sector, which has now recorded four straight months of negative growth.
The UK economy remains 0.8% below its level before the coronavirus pandemic of February 2020.
The International Monetary Fund forecast on Tuesday that the UK will grow 6.8% this year, more than any other industrialized country in the Group of Seven, and 5% next year. However, the UK economy experienced the worst recession of the seven in 2020, contracting 9.8% of its output.
With inflation expected to reach at least 4% in the coming months against a backdrop of rising energy bills, low productivity levels, rising taxes and an uncertain COVID backdrop as the season approaches. winter, there are fears that the economy will underperform in the coming months.
Widespread shortages are also being reported across Britain, most clearly in the long lines seen at gas stations in recent weeks and empty supermarket shelves.
The causes of the shortages are widespread, in part linked to the adjustment of global supply chains in the wake of the pandemic disruption. However, Britain is currently facing particularly acute problems as the number of truck drivers is down from usual. The causes are widespread, but it is clear that the combination of Brexit and the pandemic has prompted many workers in the European Union to leave the UK and return home.
The disruption is clearly visible in the Port of Felixstowe in eastern England, the UK’s largest commercial port. A congestion in containers and at the port has been blamed on a shortage of drivers and prompted the Maersk shipping company to hijack some of its larger ships.
The backlog at Felixstowe, which handles 36% of UK freight container volumes, will add to concerns about the key Christmas season.
Peter Wilson, managing director of the Cory Brothers shipping agency, said the UK had a “significant nip point” around truck drivers and the demand for them to carry cargo from ports.
“This is a really big issue for us here in the UK,” he told BBC radio.
When asked if this would affect Christmas, he said he had the ‘potential’ but stressed the supply chain ‘will not fail in the UK’
However, he said some items may not be available as Christmas approaches, including toys and food.