UK economy grows 6.6 per cent in July amid easing of coronavirus restrictions

UK economy recovered half of GDP lost since the start of the pandemic lockdown, amid faster rate virus spreading with the R number rising from 1 to 1.2, as the government faces backlash on new curbs.

The Office for National Statistics (ONS) said that the UK “ has still only recovered just over half of the lost output caused by the coronavirus”. Hairdressers, pubs, and restaurants contributed to growth after companies were allowed to reopen in July. The UK’s economy measured by the volume of goods and services it produces is still 11.7% smaller than it was in February before the lockdown was imposed.  Growth in July was slower than the 8.7 per cent expansion seen in June.  The reopening of pubs and restaurants meant the accommodation and food services sector rose by140.8 per cent between June and July, while the alcohol industry grew by 32.7 per cent.

The UK fell into recession after activity shrank for the first and second quarters of this year after the government announced a lockdown to stop the spread of the coronavirus, as the economy shrank by 7.6 per cent in the three months to July. The recovery will stall if Covid-19 continues to rise, keeping people from working from home and avoiding consuming services that require human contact. The Coronavirus Job Retention Scheme is due to end on 31 October.

Although the virus is still at much lower levels across the UK than at the peak of the pandemic in April, a REACT study of 150, 000 volunteers in England found “accelerating transmission” at the end of August and the start of September, particularly rising among 18-24-year-olds across the northeast, northwest, and Yorkshire.

England, Wales, and Scotland are reducing the number of people from multiple households allowed to meet socially to six in both outdoors and indoors to all ages starting from Monday. Face coverings must be worn in England, Scotland, Northern Ireland, and Wales. Shopworkers are exempt.