UK economy slows growth

Status: 11/11/2021 10:33 a.m.

The UK economy grew more slowly than expected in the third quarter, despite Freedom Day and the lifting of most corona restrictions. Above all, the lack of fuel is a burden.

In Great Britain, the gross domestic product (GDP) increased by 1.3 percent from July to September compared to the previous quarter, according to the statistics office in London (ONS). The British economy is thus continuing its recovery from the Corona slump, albeit to a somewhat weaker extent than expected. Economists from the Bank of England had forecast growth of 1.5 percent.

In the spring quarter, the increase was 5.5 percent. At that time, the companies had benefited greatly from the relaxation of numerous corona measures. According to the ONS, the growth in summer is largely due to these easing.

Bars and restaurants benefit

In July, the British celebrated the end of most Corona requirements with a “Freedom Day”. Bars and restaurants, for example, benefited from this. At the same time, the economy was slowed down by the temporary shortage of petrol and diesel at many petrol stations in England. This was caused by a shortage of truck drivers, which in turn goes back to the country’s exit from the EU, through which many Eastern European workers have returned to the continent.

“While private consumption and government spending grew faster than we expected, business investments and exports were disappointing,” is the assessment of Kallum Pickering, an economist at Berenberg Bank.

The British economy slumped 9.7 percent in the corona pandemic in 2020, the sharpest decline in 300 years. The International Monetary Fund (IMF) is predicting growth of around seven percent this year. In September the GDP of the world’s fifth largest economic power was still 0.6 percent below the level of February 2020, the month before the corona outbreak in the country.

The German economy achieved an increase of 1.8 percent in the summer. But also in this country the outlook is becoming more pessimistic: Most recently, the so-called “economic wise men” revised their economic expectations for the current year down to 2.7 percent. In March they had expected an increase of 3.1 percent.

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