Figures released today by the Office for National Statistics stated the economy gre2 6.6% in July. This coming after businesses such as hairdressers, pubs and restaurants were allowed to reopen in July.
This is now the third consecutive month that the UK economy has expanded, however the ONS has said that “The UK has still only recovered just over half of the lost output caused by Coronavirus.”
The UK economy is still more than 11% smaller than it was in February though the reopening of certain businesses provided a kickstart to the economy. The rate of the bounce back is slowing down with the growth for June slightly higher than July.
With government support schemes winding down it is the worry of some that this will slow down the recovery of the economy even further with businesses not being able to access the support needed to help depleted cash flows and with employment set to rise after the Job Retention Scheme closes at the end of October.
Commenting on GDP figures for July 2020 published today by the ONS, BCC Head of Economics Suren Thiru said:
“The latest data confirms that UK economic activity continued to pick-up in July as lockdown restrictions eased further.
“The UK economy is currently in a period of temporary calm, with activity buoyed by the government’s emergency support measures and the unwinding of pent-up customer demand as more parts of the economy reopened.
“However, with many firms continuing to face an unprecedented cash crisis and unemployment likely to surge as the support schemes wind down, there remains little prospect of a sustained resurgence unless substantial action is taken.
“To protect jobs and livelihoods, the government should consider extending and adapting the Coronavirus Business Interruption Loan Scheme to ensure businesses are supported sustainably over a longer period, as well as introducing a more significant package of support for firms placed under local restrictions.”
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