August GDP data just released in the UK by the Office for National Statistics, came in at a disappointing 2.1% missing analysts estimate of 4.6%.
After over 20% contraction of economic activities in the second quarter (Q2), market players expected a more positive quarter three (Q3) but not enough to recover from the plunge in the previous quarter.
The country’s emergence from lockdown in recent months has paved the way for a recovery in many sectors of the economy, but cases of Covid-19 have been growing exponentially in recent weeks as a second surge appears to be underway.
Bank of England governor Andrew Bailey on Wednesday warned there was still an unprecedented level of uncertainty and the economy is still at risk.
Bailey added that the economy faced the prospect of an “uneven” recovery as the British government battles a second wave of rising infections with tighter restrictions, particularly on the hospitality sector.
“When you look at areas of activity in the economy that require more close social interaction, it’s no surprise that they have been the weakest to recover,” he said.
“Other areas of the economy have actually recovered very strongly — and a few areas of the UK are ahead of where they were pre-Covid.
As of Friday morning, the UK has confirmed 564,502 cases and 42,682 deaths, according to data compiled by Johns Hopkins University.
On September 24, UK Finance Minister Rishi Sunak announced a new emergency package of measures to contain unemployment, replacing the country’s furlough scheme which is due to expire this month.
Lillian Jijingi