Britain's recovery from the coronavirus pandemic continued for the third month in a row in July as businesses reopened and manufacturing resumed. The Office for National Statistics (ONS) said gross domestic product rose by 6.6 per cent in July compared with the previous month, continuing a rebound from the Covid-19 crisis as lockdown measures were relaxed.
Chancellor Rishi Sunak laid the groundwork for a delay to the autumn budget in a statement to the House of Commons. He told MPs that he had asked the Office for Budget Responsibility (OBR) to prepare economic forecasts to be published in “mid to late November”, but did not give a date for the set-piece tax and spending event.
Sunak said the government had extended its support for businesses and households by pumping money into job creation schemes, cutting VAT for the hospitality and tourism sector and launching the eat out to help out schemes. He said, “While today's figures are welcome, I know that many people are rightly worried about the coming months or have already had their job or incomes affected. That's why supporting jobs is our first priority and why we've outlined a comprehensive plan for jobs to ensure nobody is left without hope or opportunity.”
Latest official growth figures reveal the reopening of pubs, campsites, and hairdressers fuelled a rebound in activity in July, while car sales exceeded pre-crisis levels for the first time. After widespread stoppages during lockdown, manufacturing and house building activity rose. The recovery in July followed growth of 8.7 per cent in June and 2.4 per cent in May, after a record-breaking 20 per cent contraction in April during lockdown. GDP fell by 7.6 per cent with declines across all main sectors of the economy.
The statistics come after Britain entered the deepest recession in history following a second successive quarterly decline in the three months to June. The fall in second quarter GDP of 20.4 per cent outstripped any other advanced economy, with the UK entering lockdown later than other countries and taking longer to relax restrictions. Britain's GDP is now 18.6 per cent higher than its lowest ebb in April after the pandemic brought activity around the globe to a standstill. However, it still remains 11.7 per cent below the levels recorded in February before the disease spread to Britain.
The Bank of England said the GDP is not expected to return to pre-crisis levels until at least the end of next year.
