'No time for complacency' as UK economy bounces back

Business leaders have warned against complacency as the UK economy bounced back in the second quarter of 2021.

Thursday, 12th August 2021, 10:38 am
Updated Thursday, 12th August 2021, 10:40 am
Restrictions have now eased, helping spending

The economy grew by 4.8 per cent as lockdowns lifted, getting people back into pubs, the Office for National Statistics has said.

The country’s gross domestic product (GDP) increased by a further one per cent in June, creating five consecutive months of growth.

The economy also speeded up from 0.6 per cent growth in May, the ONS said.

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Lockdown restrictions slowly eased through much of the quarter.

Outdoor dining opened again in April, the first month the quarterly data includes, and further restrictions were lifted in May.

Suren  Thiru, Head of Economics at the British Chambers of Commerce, said: “The latest data confirms a robust rebound in output in the second quarter as the UK economy unlocked and restrictions eased.

“The increase in output in the second quarter largely reflected a striking rise in household spending as the easing of restrictions helped consumers spend some of their ‘unanticipated’ savings accumulated during lockdowns, boosting output from consumer facing services firms."

He added: “Business investment remains well short of pre-pandemic levels following an underwhelming revival in the second quarter and means that it may be a weak point of the recovery, limiting UK productivity and competitiveness.

“Strong growth in the second quarter may be the high point for the UK economy with economic activity likely to moderate in the third quarter as staff shortages, supply chain disruption and consumer caution to spend limits any gains from the lifting of restrictions in July.

“Against this backdrop, policymakers must guard against complacency over the underlying strength of the recovery.

"A comprehensive rebuild strategy to turbocharge growth post-Covid is needed, alongside a clear plan for dealing with any  future virus response, to give firms the confidence to start firing on all cylinders again.”