UK GDP grows 2.1% in August, fourth monthly increase in a row

The UK GDP grew by 2.1% in August, new data published by the Office for National Statistics (ONS) has revealed.

The fourth consecutive monthly increase to the GDP, following the further easing of lockdown measures during August, the figure follows growth of 6.4% in July, 9.1% in June and 2.7% in May.

However, the latest data showed that the level of output has not fully recovered from the record falls seen across March and April, after the record fall of 19.5% in April.

The ONS revealed that the UK GDP is now 21.7% higher than its April low, but stated that it remains 9.2% below the February level, before the coronavirus pandemic struck.

Commenting on the latest figures, Kingswood chief investment officer, Rupert Thompson, said: “UK growth disappointed in August with GDP rising only 2.1%, well short of expectations for a 4.6% increase. While the recovery continues, its pace has slowed substantially over the last three months.

“These numbers show the recovery slowing significantly even before the recent re-imposition of local restrictions and lockdowns and can only increase the pressure on the government – both over any new restrictions and the need to increase support for the most affected sectors.”

Hargreaves Lansdown senior investment and markets analyst, Susannah Streeter, added: “These are initial estimates and could be subject to revision, but the GDP numbers indicates that far from a sharp, V-shaped recovery from the 20.4% contraction in the second quarter of 2020, we should expect a very bumpy road head, with even a W-shaped path looking more possible.

“The unwinding of the furlough scheme, with the replacement job support scheme only supporting employees who can be kept on part-time, is expected to lead to further mass redundancies. That could have a downward spiralling effect on consumer demand as worries also ramp up about the risks of a no-deal Brexit and the effect that could have on the depressed economy.’’

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