The UK economy saw record growth of 15.5 per cent in July to September, as figures from the Office for National Statistics reveal a fifth consecutive month of economic expansion.
While GDP rose by 1.1 per cent during September it was 8.2 per cent below February 2020 levels before pandemic restrictions were implemented.
The easing of the first lockdown helped the economy bounce back from recession but the rate of recovery has slowed each month since the largest rise of 9.1 per cent in June.
September figures were up 1.1 per cent on August. This compares with rises of 2.7 per cent in May; 9.1 per cent in June; 6.3 per cent in July and 2.2 per cent in August 2020.
The ONS sounds that while the figures reflect some recovery activity following the record contraction in quarter two, the level of GDP in the UK is still 9.7 per cent below where it was at the end of 2019.
Compared with the same quarter a year ago, the UK economy fell by 9.6 per cent.
But the growth recorded for the third quarter of this year marks the largest quarterly expansion in the UK economy since ONS quarterly records began in 1955.
Responding to today’s published figures, Aviva head of savings and retirement Alistair McQueen suggests recession “looks certain to resume in 2021”.
He says: “This latest data reveals that the UK’s economic recovery is slowing.
“The recovery in Q3 output levels was expected after the depths of the spring lockdown and the boost to consumer spending triggered by the Eat Out to Help Out scheme. However, September’s data points to a slowdown in the country’s economic revival.
“Severe headwinds are forming which are likely to continue to curb the recovery in the future. The reintroduction of a nationwide lockdown in England will restrict economic activity and hit future output levels. This is likely to be further compounded by a reduction in consumer confidence due to a resurgence in virus cases.
“Acute economic uncertainty is causing recessionary fears to surface again. Today’s positive figure for Q3 is unlikely to carry over to Q4, suggesting that the recession of 2020 looks set to resume next year.
“It is key that households assess their present circumstances to improve visibility over their future financial position. Planning now will help people weather further economic disruption.”
AJ Bell financial analyst Laith Khalaf says: “A strong rebound in the economy is clearly positive, but we should keep the champagne on ice for now.”
He adds: “The real litmus test for the economy going forward is how soon it can return to pre-pandemic levels. News of a potential vaccine makes the climb back look a lot less daunting, not only because it offers the prospect of a brighter future, but also because it gives businesses and individuals greater confidence in the here and now. Businesses can see a glimmer of light at the end of the tunnel, rather than an interminable struggle to stay afloat until we return to some semblance of the old normal at some unknown point in the future.”
