The UK economy has seen record growth of 15.5% in the third quarter of 2020. The growth comes after the economy has witnessed a six month slump as a result of the first coronavirus lockdown.
There is still progress to be made however, with the economy still to regain 8% in order to get back to pre-lockdown levels.
This positive news comes after statistics showing a continual rise in unemployment figures, it is yet to be determined how the effects of the second lockdown that we are currently in will impact the recovery of the economy in the final three months of the year.
September saw growth of 1.1%, marking a fifth consecutive month of growth. This number however is comparably lower than previous months suggesting the rate of recovery is slowing down.
The return of children to school boosted activity in the education sector along with all other area of the economy.
Sharon Smith, CEO of Herefordshire & Worcestershire Chamber of Commerce, said: “News of this growth is welcomed by the Chamber and businesses across the country. There is however still work to be done, with nearly 10% of the economy left to recover and the effects of the winter lockdown to be determined, businesses still have a long way to go.
“With businesses facing tougher restrictions during October and having to navigate this second lockdown we currently find ourselves in, there is still work to be done. The improved package of support provided by the government including the extension of the Job Retention Scheme and numerous business grants will go a long way to providing businesses with the lifeline they need to weather the storm of the winter and continue the recovery effort going into 2021.
“Any extension to the December 2 deadline currently set for the lockdown to end will threaten a return to the record low figures witnessed at the height of the first lockdown. Government must ensure they consider the impact on businesses and set out a suitable plan for recovery which balances the restrictions placed on businesses with appropriate levels of support available to them.”
Arjun Heir, Policy Executive at Herefordshire & Worcestershire Chamber of Commerce, said: “Whilst it is welcome news that the economy has recovered significantly during the pandemic, we have to be skeptical about future growth in the market and economy. As we have seen further national lockdown for a period of one month, this is going to have a substantial impact on businesses within Herefordshire and Worcestershire for many months to come.’’
Commenting on the first estimate of GDP for Q3 2020, published today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “While there was confirmation that the UK exited recession, the historically strong headline figure masks a loss of momentum through the quarter, as the temporary boost from the release of pent-up demand as the economy reopened gradually faded. With output still well short of pre-crisis levels there was little sign of a ‘V’-shaped recovery even before the latest lockdown.
“Although less restrictive than the first, a second lockdown means that output is likely to contract in the fourth quarter. With much of the economy now in a weaker position to withstand periods of extended closure than at the start of the pandemic, the damage to economic activity in the near term may be significant, particularly if restrictions extend beyond 2 December.
“Until a vaccine is rolled out, mass testing remains crucial to getting the economy moving and avoiding further damaging lockdowns. With many firms facing a significant cash crisis, increased grant support for those impacted by restrictions is vital to helping the UK economy weather a difficult winter ahead.”
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