FTSE 100 LIVE: UK economy grows 2.1% in August – experts fear lockdown slowdown

Gross National Product (GDP) was up by 2.1 percent during the month, according to data from the Office for National Statistics (ONS). It was the fourth consecutive month of growth, after the economy took a serious hit during the depths of the Covid-19 pandemic. But it is less than half of what experts had expected, and a major slowdown since July.

Analysts expected that GDP would increase by 4.6 percent, according to a consensus taken by Pantheon Macroeconomics.

In July, GDP was up by 6.4 percent, and in June it rose by 9.1 percent, according to ONS data.

The Government invested hundreds of millions of pounds to get the economy back on its feet in August, including promising to pay for half a restaurant bill during parts of the month.

ONS deputy national statistician for economic statistics Jonathan Athow said: “The economy continued to recover in August but by less than in recent months.

“There was strong growth in restaurants and accommodation due to the easing of lockdown rules, the Eat Out To Help Out scheme, and people choosing summer ‘staycations’.

He added: “However, many other parts of the service sector recorded muted growth.

“Construction also continued its recovery, with a significant boost from housebuilding.

“There was limited growth in manufacturing, which remains down on its pre-pandemic level, with car and aircraft production still much lower than the start of the year.”


8:17am update: Rishi Sunak announces new support package

The Chancellor is to announce further support for jobs and businesses affected by coronavirus shutdowns amid calls to help the hardest-hit industries and regions.

Rishi Sunak will detail “the next stage” of the Jobs Support Scheme on Friday, ahead of new restrictions expected for the hospitality sector.

Cities in northern England and other areas suffering a surge in Covid-19 cases may have pubs and restaurants closed among measures to combat the spread.

A Treasury spokeswoman said: “The Chancellor will be setting out the next stage of the Job Support Scheme later today, that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months.”

8.05am update: FTSE soars on open

FTSE has surged this morning, reversing a pattern of early losses this week.

The UK index closed at 5,978 yesterday and has already risen to 6,006 today.

This marks a rise of 28 points in just five minutes.

7:10am update: UK economic growth

The UK economy grew by 2.1 percent in August as the pace of recovery slowed, the Office for National Statistics has said.


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