United Kingdom economy continues recovery in July but remains below pre-pandemic levels

Andrew Cummings
September 13, 2020

The UK economy expanded for the third straight month in July as lockdown measures continued to ease, data published by the Office for National Statistics showed Friday.

U.K. GDP shrank by a record 20.4% in the second quarter of 2020.

Thomas Pugh, an economist at London-based economic analysis firm Capital Economics, said: "The strong 6.6 percent m/m rise in GDP in July suggests that the record-breaking negative growth rate of GDP in Q2 will be followed by a record-breaking positive growth rate in Q3".

According to data published by the ONS, the GDP of the country expanded 6.6 percent in July in comparison to a month ago after a monthly expansion of 8.7 percent in June and 2.4 percent in May.

However, the economy remained 11.7 per cent smaller than its level in February, before the pandemic hit Britain.

In the rolling three months to the end of July, UK GDP fell 7.6%, as government restrictions on movement continue to dramatically reduce economic activity.

"Education grew strongly as some children returned to school, while pubs, campsites and hairdressers all saw notable improvements". Vehicle sales exceeded pre-crisis levels for the first time with showrooms having a particularly busy time.

Growth in the much smaller manufacturing and construction sectors exceeded forecasts.

Howard Archer, at E&Y's Item Club said: "It was particularly encouraging to see all output sectors of the economy make strong contributions to growth in July".

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