UK's economic recovery from Covid-19 crisis continues

Britain’s recovery from the coronavirus pandemic continued in July as shops reopened and manufacturing activity resumed but the economy has recovered little more than half the ground lost since the onset of the crisis.

ِAccording to report published in the Guardian, the Office for National Statistics (ONS) said gross domestic product (GDP) rose by 6.6% in July compared with the previous month, continuing a rebound from the Covid-19 crisis as non-essential shops reopened and lockdown measures were relaxed.

The reopening of pubs, campsites and hairdressers fuelled a rebound in activity, while car sales exceeded pre-crisis levels for the first time. After widespread stoppages during lockdown, manufacturing activity recovered and house building activity rose, although the ONS said production and construction levels still remained well below previous levels.

Activity in the accommodation and food services sector, which includes pubs, cafes, restaurants and hotels, jumped by 140.8% in July as the government allowed venues to reopen with physical-distancing measures in place. However, the level of output remained 60.1% below where it was before the crisis struck, reflecting the struggles facing sectors more dependent on social interaction while the risks to public health remain.

The recovery in July followed growth of 8.7% in June and 2.4% in May, after a record-breaking 20% contraction in April during lockdown. Over the broader three-month period to the end of July, GDP fell by 7.6%, with declines across all main sectors of the economy.

The figures come after Britain entered the deepest recession since records began in the three months to June, in an economic decline outstripping any other advanced economy, with the UK entering lockdown later than other countries and taking longer to relax restrictions.

After staging a rapid recovery in recent months, GDP is now 18.6% higher than its lowest ebb in April after the pandemic brought activity around the globe to a standstill. However, faced with the unprecedented scale of the Covid recession, it remains 11.7% below the levels recorded in February before the disease spread to Britain.

Concerns are also mounting that Britain’s economic fightback from the crisis will falter as job losses rise and demand for goods and services remains depressed while risks to public health from the coronavirus crisis remain. According to the Bank of England, GDP is not expected to return to pre-crisis levels until at least the end of next year.