Hospitality Reopening Boosts UK Economic Rebound

Hospitality Reopening Boosts UK Economic Rebound
Customers drink beer at The Holland Tringham Wetherspoons pub after it reopened following the outbreak of COVID-19, in London, on July 4, 2020. (Hannah McKay/Reuters)
Simon Veazey

The UK economy rebounded by 4.8 percent in the last quarter, according to official statistics, boosted by people returning to pubs and to medical appointments, as lockdown measures eased.

In June, gross domestic product rose by 1 percent, higher than expected, but remains  2.2 percent lower than before the CCP (Chinese Communist Party) virus pandemic. The figures were published by the Office for National Statistics (ONS) on Aug. 12.

Jonathan Athow, deputy national statistician and director general for economic statistics at the ONS, said, “The UK economy has continued to rebound strongly, with hospitality benefiting from the first full month of indoor dining, while spending on advertising was boosted by the reopening of many services.”

“Health services also showed growth, with many more people visiting their GP.”

Britain’s economy was one of the worst hit during pandemic lockdowns among the richer nations, dropping by 10 percent last year.

The United States’ economy has already recovered to its pre-pandemic level.

Chancellor Rishi Sunak said, “I know there are still challenges to overcome, but I feel confident in the strength of the UK economy and the resilience of the British people.”

But the Liberal Democrats and the Trades Union Congress (TUC) warned against thinking that support could be withdrawn from the economy because of higher GDP.

TUC General Secretary Frances O’Grady said: “The economy is still fragile, with nearly 2 million people still on furlough. A premature end to furlough will needlessly cost jobs and harm our economic recovery.”

Julian Jessop, economics fellow at free market think tank the Institute of Economic Affairs, said the improving health of the UK economy was “reassuring” after it had appeared to falter in May.

“With COVID restrictions eased further since, and the ‘pingdemic’ permitting, GDP is on course to return to pre-pandemic levels by the autumn,” he said in a statement. “This would be much sooner than most had expected.”

“The chancellor should therefore continue to wind down support that is no longer required, including the furlough scheme, and allow stronger growth to repair the public finances without even more tax increases.

“The main headwinds are now coming from problems on the supply side, including shortages of parts and raw materials, which are holding back manufacturing and construction. These are global problems (Germany has actually been hit harder than the UK) and should ease over time.”

The International Monetary Fund predicts the UK economy will grow by 7 percent in 2021, the same as the United States.

However, the Bank of England is less optimistic, predicting it will instead return to a pre-pandemic rut, with 5.75 percent growth next year, but only 1.25 percent in 2023.

PA and Reuters contributed to this report.
Simon Veazey is a UK-based journalist who has reported for The Epoch Times since 2006 on various beats, from in-depth coverage of British and European politics to web-based writing on breaking news.
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