The latest figures from the Office of National Statistics show that the UK economy continues to recover from the economic aftershock of the COVID-19 pandemic.
In August, the UK economy grew by 2.1%, marking the fourth consecutive month of expansion following the slump caused by the national lockdown earlier this year. The growth has been attributed to the introduction of the “Eat Out To Help Out” scheme, introduced by the government to boost the flagging hospitality sector.
Under this scheme, diners could avail themselves of a 50% discount (capped at £10 per individual) on food and non-alcoholic beverages at participating restaurants. The scheme ran from Mondays to Wednesdays throughout August. HM Treasury statistics revealed that over 100 million discounted meals were claimed by diners during this time, with around 84,000 restaurants participating in the scheme.
While this seems to be a positive sign towards recovery, experts warn the UK is still not entirely out of the clear. Though the economy has grown in August, the rate of growth is slower than the expansion seen in June (8.7%) and July (6.6%). Additionally, sectors like services and construction were still well below February levels.
So while the UK has technically come out of recession - defined as two consecutive quarters of a shrinking Gross Domestic Product (GDP) - the slowdown in growth rate is still a worrisome indicator that the economic recovery may be tapering out. Additionally, the economic output for August is still 9.2% below pre-pandemic levels, showing that the UK has a long way to go before pulling itself back to normal.
Jonathan Athow, the ONS deputy national statistician for economic statistics, stated, "The economy continued to recover in August but by less than in recent months. There was strong growth in restaurants and accommodation due to the easing of lockdown rules, the Eat Out to Help Out scheme and people choosing summer 'staycations'. However, many other parts of the service sector recorded muted growth.”
Furthermore, the impending winding up of the furlough scheme is expected to drive millions into unemployment, exacerbating the economic slowdown. And finally, concerns over a no-deal Brexit are also likely to increase market uncertainty.
Trade groups and charities have been campaigning for increased government support to protect vulnerable businesses and individuals in the tough upcoming winter months. Chancellor Rishi Sunak is expected to announce further support measures later today, which will hopefully help to address some of these concerns.