The British economy’s bounce back from a COVID-19 induced recession continued to lose steam in August.
The Office for National Statistics (ONS) said on Friday that UK GDP grew by just 2.1% in August. Economists had been expecting monthly growth of 4.6%.
The figure, which is an early estimate and could be subject to revisions, shows momentum continues to slow for the UK economy. Output expanded by 6.6% in July and 8.7% in June, following a record 20.4% slump in the second quarter of 2020.
The slowdown came despite a boost for the hospitality sector in August through the government’s Eat Out to Help Out scheme.
While August marked the fourth consecutive month of growth, the UK economy remains around 9.2% below pre-pandemic levels.
Sanjay Raja, Deutsche Bank’s chief UK economist, said the slowdown was likely to continue into the winter.
“While the pace of the initial rebound may have been impressive, the path forward for the UK economy will be more difficult particularly for the services sector, which remains vulnerable to further localised and industry targeted lockdowns,” Raja said in a note previewing Friday’s announcement.
The government’s job support scheme is set to end this month, which could further weigh on growth. The ONS this week estimated that 9% of the UK workforce remain on furlough. Economists think many will be out of work when the scheme ends.