Research Briefing | Nov 12, 2021

UK | Latest GDP numbers offered a curate’s egg

UK | Latest GDP numbers offered a curate’s egg

The latest GDP numbers were a mixed bag. Growth accelerated to a three-month high in September, but this was almost wholly due to higher health output. And past revisions revealed a softer than expected performance in Q3. Burgeoning cost of living pressures will weigh on activity over the rest of this year and into 2022. That said, recent high-frequency data and retail surveys suggest that consumers’ appetite to spend has not run out of steam yet.
What you will learn:

  • September’s gain left the economy 0.6% shy of its immediate pre-COVID size in February 2020, the smallest gap since the pandemic began.
  • GDP growth in September was heavily dependent on the health sector, where activity was boosted by a big increase in face-to-face appointments at GP surgeries and a surge in Covid testing.
  • But with the easy gains from reopening the economy exhausted and policy support being withdrawn, the recovery has entered a much tougher phase.
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