UK economy’s coronavirus collapse no longer measured as worst in 300 years

Business

The UK economy grew more strongly than previously thought in the second quarter as consumers curbed their savings to fuel a spending splurge.

Gross domestic product (GDP) increased by 5.5% in the April-June period, according to the Office for National Statistics (ONS), which had initially estimated growth of 4.8%.

It means that by the middle of this year, Britain was closer to recovering the ground lost as a result of the coronavirus crisis.

The ONS now thinks that by the second quarter, GDP was 3.3% below where it was at the end of 2019, having previously estimated a 4.4% shortfall.

More recent figures suggest that the recovery has since experienced a sharp slowdown after supply chain issues such as a lack of 100,000 HGV drivers and global chip shortages, as well as the “pingdemic” forcing workers to isolate, took their toll.

But the second quarter was boosted by a 7.9% rebound in household spending after the economy reopened in the spring, which represented four percentage points out of the 5.5% growth figure.

The household saving ratio fell sharply to 11.7%, down from 18.4% in the first quarter, which was the second highest on record.

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