UK set for record-breaking economic growth in third quarter



Britain appears to be on course to enjoy a record-breaking economic recovery in the third quarter, fuelled by consumers who are spending again after the coronavirus lockdown and a planned reopening of schools.


Although the UK economy has been hit hard during the pandemic — it recorded the sharpest fall in gross domestic product in the second quarter compared with the last three months of 2019 of any G7 nation — new data on spending suggest many Britons are splashing the cash once more.


A new average of forecasts by City of London economists suggests that GDP is set to rise 14.3 per cent in the third quarter, reversing 55 per cent of the 20.4 per cent drop in output in the three months to June 30.


But the trajectory of the economy after this bounce is much more difficult to predict, said independent forecasters, with a lot depending on the spread of Covid-19, the quantum of social distancing measures, and whether consumers rein in their spending amid rising unemployment and a possible second wave of infections. These factors are heavily interlixed, added the economists.


Recommended Why the UK economy stands out Consumer spending initially recovered relatively slowly in the UK compared to elsewhere in Europe. The shutdown of most shops, restaurants and pubs had to be kept in place longer to counter higher infection rates in Britain, but the relaxation of restrictions in June and July has brought a big change in spending patterns.


In the first two weeks of August, consumer spending, including leisure, was about 7 per cent higher than during the same period one year earlier, said Fable Data, which collates information across many different forms of electronic payment.

整理多種電子支付形式信息的數據公司Fable Data表示,8月份前兩周,包括休閑活動在內的消費者支出較上年同期增長約7%。

More meals have been bought in pubs and restaurants due to the government’s “eat out to help out” discount scheme that runs through August, said Avinash Srinivasan, analyst at Fable Data.

Fable Data公司的分析師阿維納什·斯里尼瓦桑表示,由于政府的“在外就餐幫經濟”(eat out to help out)折扣計劃持續至8月份,在酒吧和餐廳購買的膳食數量有所增加。

“We have clearly seen an improvement [in total spending] over the past month,” he added.


While the easing of lockdown restrictions has prompted a sharp rise in consumer spending, third-quarter GDP should also be boosted by the proposed reopening of schools across much of the UK in September.


These adjustments are expected to boost the monthly GDP growth figures for July and August by about 2.5 percentage points.


Recommended Pandemic shows US must make vital products at home Jonathan Portes, professor of economics at King’s College London, said: “One key reason the UK’s economic performance appeared worse than other countries is that the ONS has done a better job of estimating the fall in education outputs in the second quarter. That means output will automatically bounce back.”

Recommended Pandemic告訴我們必須在國內生產重要產品,倫敦國王學院的經濟學教授喬納森·波特斯說:“英國經濟表現似乎不如其他國家的一個關鍵原因在于,英國國家統計局在估算第二季度教育產出降幅方面更加真實。這意味著(學校開放后)產出將自動反彈?!?

GDP growth in the third quarter could also potentially benefit from a rebound in the health sector. It shrank in the second quarter, partly reflecting how hospitals cancelled routine operations to focus on treatment of Covid-19 patients.


But the scale of the boost is unclear, and some economists think that the ONS overestimated the decline in output in the education and health sectors in the second quarter.


Andrew Sentance, adviser to Cambridge Econometrics, a consultancy, said: “The ONS has not allowed for the fact that activities have had to be adapted to changing circumstances. So the [statisticians] have grossly over-egged the fall in output in the second quarter.”


The July and August GDP figures, released in September and October, could well provide some relief for the government, currently reeling from the secondary school results fiasco in England.


As Bank of England chief economist Andy Haldane has said repeatedly, GDP data containing better economic news might encourage more consumers to spend.


Line chart of Annual spending change by week (%) showing Some areas of spending have improved rapidly in recent weeks


But the anticipated big rebound in third-quarter GDP will not be sufficient to resolve lingering doubts about Britain’s economic strength.


Several factors risk holding back the recovery, led by the wind down of the government’s furlough scheme and the fact many business activities are not fully viable while the virus persists.


Samuel Tombs, economist at Pantheon Macroeconomics, said that Britain’s long-term economic recovery will be much more difficult after a stunning third quarter.


“The economy’s high reliance on consumer services and the impending withdrawal of government support for the labour market suggests that the level of GDP will track a lower path than in most other economies going forwards,” he added.

他補充稱:“英國經濟對消費服務的高度依賴,以及政府即將撤銷對勞動力市場的支持,表明未來英國GDP水平將低于多數其它經濟體?!?br />