UK economy surges 4.8% in June

The UK economy grew by 4.8% in June as Covid-19 restrictions surrounding retail and leisure were eased across the UK, according to figures published by the Office of National Statistics (ONS). 

Gross domestic product (GDP) is estimated to have grown for a fifth consecutive month in June 2021, by 1.0%, but remains 2.2% below its pre-pandemic level.

The results published showed that the services sector continued to be the main contributor to recovery in June 2021, up by 1.5% following a revised 0.7% growth in May 2021.

It was also noted that food and beverage services activities remained the “main contributor” to the growth in consumer-facing services, having increased by 10.1%.

The office said that the continued strong growth means that the industry is now only 1.5% below its pre-pandemic level, and 9.0% above its August 2020 peak when the Eat Out to Help Out Scheme “boosted consumer demand for bars and restaurants”.

Alpesh Paleja, lead economist at the Confederation of British Industry (CBI),said: “Growth bounced back over the second quarter as restrictions on activity were gradually lifted, underscoring that tackling the pandemic goes hand-in-hand with supporting economic growth.

“Yet challenges to the recovery are emerging. Several supply bottlenecks have likely taken the edge off growth over the summer: a shortage of raw materials and semiconductors, continuing global supply chain disruption and staffing shortages. In the near-term, every effort must be made to safeguard the UK recovery.”

He added: “Meanwhile, pre Covid-19 issues have not disappeared. Boosting business investment and poor productivity are key to securing future prosperity and competitiveness.

“As a first step, the government must make progress on reforming the UK’s outdated business rates regime, incentivising capital spending in several of the government’s key ambitions, including levelling up and the transition to net zero.”

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