By William Schomberg and Andy Bruce
LONDON (Reuters) -Britain’s economy grew by 0.6% in September but estimates for previous months were revised lower, leaving GDP 0.6% smaller than it was in February 2020, shortly before the country went into its first COVID-19 lockdown.
The data painted a picture of an economy losing its post-lockdown momentum due to global supply chain problems and caution on the part of businesses.
Economists polled by Reuters had forecast monthly gross domestic product growth of 0.4% for September.
The Office for National Statistics said GDP in July fell by 0.2%, a bigger decline than a previously estimated fall of 0.1%, while output in August was shown rising by just 0.2%, weaker than an originally reported 0.4%.
“Although monthly output rebounded through the quarter from July’s contraction this is more likely to reflect a temporary boost from restrictions easing, rather than a meaningful improvement,” Suren Thiru, head of economics at the British Chambers of Commerce, said.
September’s growth was helped by stronger output in the health sector as people got back to visiting their doctors after falling during the pandemic, leading to a 0.7% rise in the services sector from August.
But industrial output fell by 0.4% as gas distribution shrank for a fourth month in a row.
In the third quarter as a whole, GDP grew by 1.3%, the weakest three-month growth since Britain was under lockdown in early 2021. The Bank of England and the Reuters poll of economists had forecast an expansion of 1.5%.
The world’s fifth-biggest economy shrank by nearly 10% in 2020 but the International Monetary Fund has forecast it is on track to have the fastest expansion of any Group of Seven country in 2021 when it was expected to grow by 6.8%.
However, the quick bounce-back from lockdown seen in the spring gave way to slower growth over the summer due to a combination of rising COVID-19 cases, global supply chain problems and post-Brexit shortages of some workers.
The BoE said last week, as it kept interest rates on hold, that recent economic growth had been weaker than it had expected and it would keep a close eye on the state of the labour market after the government’s job protection scheme ended on Oct. 1.
Separate data showed Britain’s trade in goods deficit widened by 9 billion pounds in the third quarter to 42.3 billion pounds, driven by rising imports from EU and non-EU countries as exports fell – especially to non-EU countries.
(Writing by William Schomberg; Editing by Andy Bruce and Kate Holton)
