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Friday, December 2, 2022

UK GDP growth “almost flat-lined” in October as recovery battered by new restrictions

UK economic growth slowed sharply in October as restrictions were tightened to control the spread of a relentless second wave of Covid-19, official figures show.

The Office for National Statistics (ONS) said gross domestic product (GDP) rose 0.4% month on month in October, marking the sixth month in a row of recovering output from the nadir of the recession in April.

But growth pared back significantly from 1.1% in September as new restrictions were brought in to try to curb rising cases of coronavirus, hitting pubs and restaurants hard.

The ONS added that the economy still remains 7.9% below pre-pandemic levels. Experts are predicting GDP will slam back into reverse in November and the final quarter of 2020 due to the second national lockdown in England.

Jon Hudson, manager of the UK Growth Fund at Premier Miton Investors: “The UK’s economic growth inevitably weakened as restrictions in October increased to prevent the spread of the virus.

“With the vaccine programme now being rolled out, and provided a trade deal with the EU can be agreed, we can start to look forward to GDP recovery in 2021 with greater confidence.”

Suren Thiru, head of economics at the British Chambers of Commerce, said:

“The sharp slowdown in economic output in October reflected the squeeze on activity from the re-introduction of tighter coronavirus restrictions, including the tier system in England. Firms in hospitality, who are most acutely exposed to the renewed restrictions, suffering particularly badly in the month.

Suren Thiru, head of economics at the British Chambers of Commerce, said: “The sharp slowdown in economic output in October reflected the squeeze on activity from the re-introduction of tighter coronavirus restrictions, including the tier system in England. Firms in hospitality, who are most acutely exposed to the renewed restrictions, suffering particularly badly in the month.

“October’s slowdown is likely to be followed by a significant contraction in economic activity in November as the effects of the second coronavirus lockdown are felt, despite the prospect of a temporary boost from Brexit stockpiling.

“While a vaccine offers real hope, failure to avoid a disorderly end to the transition period or further lockdown restrictions before a mass vaccine rollout is achieved would severely drag on any economic recovery.

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