The numbers may be “crowded for a while.”
Official data shows that UK GDP growth fell to just 0.1% in July, far below city expectations, raising questions about the possibility that the UK economy could be reversed.
The slowdown marks the end of a strong growth period that began at the beginning of the year.
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Factors such as relaxing restrictions, pent-up demand and the Farrow scheme helped support the economy earlier this year.
However, global supply chain issues and labor shortages have made the outlook worse.
The Furlough scheme ended this month, with 1.6 million people still relying on government support.
While this creates fear of a potential rise in unemployment rates, it can take time to resolve ongoing supply chain issues.
Paul Craig, portfolio manager at Quilter Investors, commented on the data. Leisure and entertainment grew well, reflecting relaxation of restrictions, but this was not sufficient to categorize it as construction or retail. ”
“While household consumption was expected to help drive economic recovery, given the symbiotic cases and concerns about pindemics that have caused many to self-isolate, the economy relies solely on consumers. It shows that it cannot be done, and instead requires other areas of the economy. Once more.”
“The UK economy shows some signs of tension due to a lack of HGV drivers and supply chain issues. This takes a little time to resolve itself, so the numbers will be a little bumpy for a while. It could be. Inflation remains a concern, and this could be enough to not join Andrew Bailey and the MPC in the ECB and withhold its tapering plan,” Craig said.
