Activity in the United Kingdom rebounded slightly in August with an increase of 0.2% in gross domestic product (GDP) driven by services, the Office for National Statistics (ONS) said on Thursday, even if analysts judge that the risk of a recession has not yet been ruled out. In July, GDP contracted by 0.6%, a figure revised downwards, specifies the ONS. “This means that it is still difficult to say whether the economy contracted in the third quarter,” said Martin Beck, economist at EY ITEM Club.
At the end of September, the ONS indicated that growth in the United Kingdom had been stronger than initially estimated in the first quarter, at 0.3%. It remains estimated at 0.2% for April to June. This revised data estimated UK growth at 1.8% between the last quarter of 2019, just before the pandemic, and the second quarter of this year, putting the country ahead of Germany (0.2%) and France (1.7%) for the same period, whereas previously it was described as the red lantern of the G7.
“The UK has grown faster than France and Germany since the pandemic and today’s data shows that the (British) economy is more resilient than expected. While this is a good sign, we still need to get inflation under control,” commented Chancellor of the Exchequer Jeremy Hunt. Price rises reached 6.7% in August in the UK, the highest among the rich G7 countries, but analysts expect it to rebound strongly in September.
Ruth Gregory, of Capital Economics, estimates that the rebound in GDP in August “increases the chances that the economy will escape recession” but she still anticipates a contraction of “0.2% in both the third and fourth quarters”. Two consecutive quarters of contraction is the definition of a technical recession.
This article is originally published on lefigaro.fr
