According to the most recent official figures, the UK’s economic growth slowed between the months of July and September as product supply issues hampered the recovery.
According to the Office for National Statistics, consumer spending increased as the UK continued to emerge from the lockdown. However, this was offset by drops in other parts of the economy, leaving three-month growth at 1.3 percent.
This indicates that the market is 2.1 percent lower than it was in the final quarter of 2019, prior to the coronavirus pandemic. Following this news, the British pound dropped to the lowest since 2021 against the US dollar.
Growth has expanded
According to Grant Fitzner, chief economist at the ONS, service growth has expanded, aided by home buyers rushing to close deals before the stamp duty holiday expires.
“However, these were partially offset by falls in both the manufacture and sale of cars. Notably, business investment remained well down on pre-pandemic levels in the three months to September,” he said.
Growth has slowed significantly since a 5.5 percent increase between April and June, when many Covid constraints were removed. According to the ONS, the UK expanded by less than expected in July and August, prompting them to rethink down growth projections for both months.
“What happened earlier in July and August was that we had the pingdemic.” said Sarah Hewin, head of research for Europe and the Americas at Standard Chartered. “And that ended up essentially holding the economy flat.”
In comparison, the economy expanded by 0.6 percent in September. Chancellor Rishi Sunak stated that the latest figures demonstrated that his economic policies were effective.
“The economy continues to recover from Covid and thanks to schemes like furlough, the unemployment rate has fallen for eight months in a row and we’re forecast to have the fastest growth in the G7 this year,” he said.
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