UK economic growth held back by supply chain problems

Business

LONDON (AP) — The British economy slowed down during the third quarter of the year as widespread supply chain problems hobbled the recovery from the coronavirus pandemic, official figures showed Thursday.

The Office for National Statistics said the economy grew by 1.3% between July and September from the previous three-month period, with the health sector and housing market being particularly buoyant. The increase was slightly below market expectations and lower than the second quarter’s 5.5% boost.

The third-quarter result means the British economy remains 2.1% below where it was before the pandemic struck in March 2020. Last week, the Bank of England said the economy would not gain back the output lost during the pandemic until the first part of next year after previously predicting a recovery by year’s end.

Over the summer, Britain witnessed an array of supply chain problems tied to disruptions caused by the pandemic and Britain’s departure from the European Union. That was evident in the recent long lines seen at gas stations amid a shortage of truck drivers.

The statistics agency said car sales, in particular, have been hit by a shortage of computer chips, while construction projects were delayed amid difficulties in getting materials.

Debapratim De, senior economist at Deloitte, said “weakness in consumer-facing services, despite minimal social distancing restrictions over the summer, and a contraction in industrial production, highlight that parts of the economy continued to be blighted by the paucity of labor and raw materials.”

The Bank of England refrained from raising interest rates last week despite inflation that was above its target. The majority of policymakers said they wanted to see how the job market was holding up after the end of a government program that subsidized salaries during the pandemic before increasing the bank’s benchmark rate from the record low 0.1%.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Donate Now to the Food For Families Food Drive

Trending Stories

Rochester Rundown
What's Good with Dan Gross
Songs From Studio B
Download Our App

Don't Miss