London Daily

Focus on the big picture.
Tuesday, Jun 02, 2026

UK economy grew less than expected in August, as recovery from the coronavirus pandemic slows

UK economy grew less than expected in August, as recovery from the coronavirus pandemic slows

The data from the Office for National Statistics showed that GDP remained 9.2% lower than in February, before the full impact of the pandemic was felt.

The U.K. economy grew 2.1% in August on a monthly basis, as the country’s gradual recovery from the coronavirus crisis continued, albeit at a slightly slower pace.

August’s estimated growth in GDP (gross domestic product) was lower than expectations, with economists polled by Reuters expecting a monthly expansion of 4.6%. It follows an expansion of 6.4% in July, 9.1% in June and 2.7% in May, following a record 19.5% plunge in April, according to the Office for National Statistics.

Friday’s data from the Office for National Statistics showed that August GDP remained 9.2% lower than in February, before the full impact of the pandemic was felt.

GDP grew 8% in the three months to August as lockdown measures began to ease, according to the ONS.

The U.K.’s dominant services sector grew by 2.4% in August, following growth of 5.9% in July. It was boosted in large part by almost 70% growth in the food and beverage services industry, which the ONS attributed to easing of restrictions and the government’s “Eat Out to Help Out” scheme.

The country’s emergence from lockdown in recent months has paved the way for a recovery in many sectors of the economy, but cases of Covid-19 have been growing exponentially in recent weeks as a second surge appears to be underway.

The British government has imposed a 10 p.m. curfew for bars and restaurants across the U.K., with further restrictions expected in the coming weeks.

As of Friday morning, the U.K. has confirmed 564,502 cases and 42,682 deaths, according to data compiled by Johns Hopkins University.

On September 24, U.K. Finance Minister Rishi Sunak announced a new emergency package of measures to contain unemployment, replacing the country’s furlough scheme which is due to expire this month.

‘A long, difficult winter’


“With recent surveys pointing to activity softening in September, and the potential for further and more stringent localized restrictions on activity, doubt is growing as to whether the recovery can be sustained into the final quarter of the year,” UBS Wealth Management Economist Dean Turner said Friday.

“Sluggish progress is likely to encourage the Bank of England to increase its bond buying program (QE) at its November meeting.”

Since the onset of the pandemic, the central bank has cut its main lending rate twice from 0.75% to 0.1% and deployed a £745 billion ($964.6 billion) asset purchase program in a bid to shore up the economy.

“While there are positive indications from the Bank of England of growth returning to pre pandemic levels before Christmas, this is far from a done deal,” said Tom Stevenson, investment director for personal investing at Fidelity International.

“The furlough scheme comes to an end this month and there is a real danger that fear of unemployment triggers a negative feedback loop of precautionary saving and dampens consumer confidence.”

With the prospect of further localized lockdown measures being introduced Monday, Stevenson said the country was bracing itself for a “long, difficult winter.”

Newsletter

Related Articles

0:00
0:00
Close
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
Global Critical Mineral Alliances Expand as Western Nations Move to Counter Chinese Supply Dominance
United States Imposes Fifty Percent Tariffs on Mexican Steel and Aluminum Ahead of Trade Pact Review
European Union and China Head Toward Major Trade Conflict Over Clean Technology Exports
United States Economic Growth Severely Downgraded to One Point Six Percent as Stagflation Fears Mount
World Health Organization Warns Central African Ebola Epidemic is Outpacing Containment Efforts
United States Treasury Department Conditions Sanctions Relief on Reopening of the Strait of Hormuz
Iranian Air Defenses Intercept and Destroy United States Military Drone Over Bushehr Province
Iranian Armed Forces Launch Ballistic Missiles Toward Unspecified Targets Prompting Regional Condemnation
United Nations Secretary-General Warns Global Order Facing Highest Level of Conflict Since 1945
Israel Issues Sweeping Evacuation Orders in Southern Lebanon Amid Intensified Hezbollah Conflict
Russia Announces Systemic Military Strikes Targeting Ukrainian Defense and Energy Infrastructure
United States and Iranian Negotiators Reach Draft Agreement to Extend Ceasefire and Resume Nuclear Talks
United Nations Security Council Deeply Divided Over United States Capture of Venezuelan President
US and Iran Exchange Direct Military Strikes Amid Fragile Gulf Ceasefire
World Health Organization Warns of Catastrophic Ebola Outbreak in DR Congo
Russia Threatens New Wave of Strikes on Ukrainian Infrastructure and Embassies
Scientists Warn Atlantic Ocean Currents Could Collapse Faster Than Projected
Anthropic Reaches $900 Billion Valuation in Historic AI Funding Round
Washington Imposes Crippling Sanctions on Iranian Maritime Authority
Japan and the Philippines Initiate Strategic Intelligence-Sharing Pact
Microsoft Deploys Autonomous Computer-Using AI Agents to Global Markets
Anthropic Secures $45 Billion Compute Infrastructure Agreement With SpaceX
U.S. Director of National Intelligence Resigns Amid Administration Shakeup
Micron Technology Crosses Trillion-Dollar Valuation Amid Unprecedented Hardware Demand
Canada and Germany Finalize Historic Long-Term LNG Export Agreement
China Expands International Travel Restrictions on Domestic AI Researchers
Japan Approves Sweeping Overhaul of National Intelligence Apparatus
Global Airlines Scramble Logistics as Middle East Airspace Remains Fractured
Japan's Naphtha Imports Plunge 47 Percent Amid Strait of Hormuz Closure
Global Crude Prices Retreat Below $96 as Gulf Tensions Momentarily Ease
Generative AI Outperforms Human Baselines in Landmark Global Creativity Study
NASA Partners With Private Aerospace to Unveil Permanent Lunar Base Architecture
South Korean Equity Markets Surge on Next-Generation Memory Chip Frenzy
×