ONS has issued new data on UK GDP performance in Q2 2021.
Provisional data issued in August suggested economic output in the second quarter was up 4.8% Q-on-Q, but the revised data suggests slightly better performance, with growth of 5.5%. Much of this growth was accounted for by a strong upturn in household demand. This is encouraging, since it may address concern that economic recovery following COVID-19 is slowing down. However, the UK economy remains smaller than it was pre-COVID and some sectors continue to struggle (especially services like arts, recreation and travel). Looking ahead, a key risk is that capacity constraints (eg: shortage of labour, lack of transport) may damp-down recovery momentum, with businesses unable to supply all potential customers. Rising inflation also presents a risk to recovery, especially with many consumers still in a financially-fragile position. IGD’s ShopperVista research shows that shoppers are concerned about rising living costs, especially for food and drink.
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