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Economic growth stalled before November lockdown

Economic growth stalled before November lockdown

The UK’s recovery from the coronavirus crisis slowed in October, with the economy growing a mere 0.4 per cent in the month.

Figures from the Office for National Statistics show economic growth in the month was still well below the levels seen before the pandemic and GDP was around 8 per cent lower than in February.

According to the ONS, some sectors continued to recover strongly but the reintroduction of restrictions in some areas of the UK hit the services industry.

Deputy national statistician, Jonathan Athow, said: “Public services output increased, while car manufacturing continued to recover and retail again grew strongly.

“However, the reintroduction of some restrictions saw services growth hit, with large falls in hospitality, meaning the economy overall grew only modestly.”

Although October was the sixth consecutive month of economic growth, it was down from a 1.1 per cent rise in September and marked the slowest growth rate since May.

The economy bounced back at a record rate after the first lockdown, but its growth tapered in September and October. This was before the country was plunged into lockdown in November.

Richard Pearson, director at investment platform EQi, said: “Recent UK GDP figures have been painting a depressing image following the excellent rebound we witnessed earlier this year, and this month is no exception. 

“With the entirety of the UK under various levels of lockdown throughout October, it was inevitable our recovery would take a hit and growth would taper off from the summer’s jump.”

He said that while the announcement of the new vaccines had provided some relief to markets, it was a “long way to go” until the economy began to show the same relief.

Mr Pearson added: “Coupled with the ongoing uncertainty around a post-Brexit trade agreement, it’s likely the UK economy won’t recover to its pre-pandemic state for years.”

imogen.tew@ft.com

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