london skyline

United Kingdom GDP August 2021

United Kingdom: Economic activity bounces back in August

GDP increased 0.4% in month-on-month seasonally-adjusted terms in August, which contrasted July’s 0.1% decrease. August’s reading was largely driven by a recovery in the services sector, amid the lifting of remaining Covid-19 restrictions and the relaxation of self-isolation rules. In addition, the manufacturing sector rebounded on stronger vehicle production, after chip shortages had hampered car manufacturers in previous months. As a result, the economy was only 0.8% below its pre-pandemic level reached in February 2020.

On a rolling quarterly basis, GDP grew 2.9% in June–August, which was below May–July’s 4.2% expansion.

Notwithstanding August’s rebound, the economy likely slowed notably from Q2 in Q3 as a whole, due to the resurgence in Covid-19 cases since late June, and acute shortages of staff and inputs.

On the reading, James Smith, economist at ING, said:

“On the face of it, August was only a little better than July for the UK economy—at least compared to the bumper growth of the second quarter. […] the overall third-quarter GDP figure is set to come in around half the Bank of England’s 3% forecast. Having said that, the underlying details offer a slightly brighter picture. Activity in hospitality and recreation/culture is essentially back to pre-virus levels, which suggests that the economy weathered the Delta Covid-19 wave better than we’d feared at the time. The recent retracement in retail activity is less a reflection of Covid consumer caution, and more a simple rebalancing of spending back towards services.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest