The UK economy expanded by more than previously thought in the April-June quarter before what seems to be a recent sharp slowdown as post-lockdown bottlenecks, including a shortage of truck drivers, rise. Gross domestic product (GDP) rose by 5.5 per cent in the second quarter, the Office for National Statistics (ONS) said, stronger than its preliminary estimate of growth of 4.8 per cent.

The revision implies the country is no longer the worst-performing economy among the Group of Seven developed countries, when comparing GDP this summer with its level at the end of 2019. It is now tied with Germany and above Italy.

ONS said the data had been adjusted to take account of more complete data from the health sector as well as an update of its sources and methodology for calculating output.

The figures offered a clearer view of Britain's swift economic bounce-back from its coronavirus lockdown earlier this year, but there are now signs of a loss of momentum due to shortages of supplies and staff as the global economy reopens, according to British media reports.

Bank of England (BoE) governor Andrew Bailey recently 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.

Despite the slowdown, the British central bank has signalled that it is moving towards a first interest rate hike since the pandemic as it expects inflation to head above 4 per cent.

The recent ONS data showed households increased their spending by more than 7 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, ONS added.

By Fibre2Fashion
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