UK Economic Growth “Slows To A Crawl” AS GDP Rises Just 0.1% In October
The UK economy barely grew in October, contributing to concerns about the recovery from the coronavirus pandemic.
New data from the Office for National Statistics (ONS) shows that GDP rose just 0.1% in the month, below the 0.4% forecasted by economists, thanks to ongoing supply chain disruptions and staff shortages.
The figure remains below the pre-pandemic level of 0.5% seen in February 2020 and suggests that the UK economy was struggling even before the emergence of the Omicron variant in late November.
The ONS said that services output grew back to its pre-pandemic levels, growing 0.4% in October. Meanwhile, output in consumer-facing services was up by 0.3% on the month largely due to an 8.1% increase in the wholesale and retail trade. However, output at hotels and restaurants dropped by 5.5%.
“Growth disappointed in October, reinforcing concerns about the resilience of the UK’s economic recovery to the Omicron variant and the impact of further restrictions,” Alpesh Paleja, CBI lead economist, said.
“We need to create consistency in our approach and build confidence by reducing the oscillation between normal life and restrictions as we learn to live with the virus and its variants.”
“Meanwhile, supply pressures remain acute and further rises in inflation are looming. We expect growth to build further momentum ahead, but more action is needed to address longer-term challenges, including “scarring” from COVID and poor productivity.”