Research Briefing | Oct 1, 2021

UK | A stronger base, but growing headwinds

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Revisions in Q2’s national accounts showed the economy responding more strongly to exiting lockdown than initially thought. At the same time, the stock of ‘excess’ savings held by households, while still sizeable, was revised down.

What you will learn:

  • The appetite to save has stayed strong and demand for credit muted. While the recovery has supports, headwinds are building, resulting in the BoE pushing back the date at which it expects GDP to regain its pre-Covid level. 
  • The ONS’ initial estimate of GDP growth of 4.8% q/q in Q2 had pointed to a decent bounce back in activity as Covid restrictions were lifted over the spring and early summer.
  • An upward revision in Q2’s national accounts, leaving growth at 5.5%, means the economy’s reopening is now estimated to have delivered even more impetus. 

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