UK economic growth rebounds after July’s decline. GDP remains below pre-pandemic level – live business | a job

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Good morning, and welcome to our renewed coverage of the global economy, financial markets, the eurozone and business.

The UK economy grew 0.4% in August, but GDP is still 0.8% below its pre-pandemic level in February 2020, according to the Office for National Statistics. The monthly gain is just below the 0.5% rise that economists started, but a notable rebound from July, when GDP fell 0.1%.

The July GDP figure was revised down from 0.1% to 0.1% after five consecutive months of growth, mainly due to “downward-adjusted data for auto manufacturing and oil and gas and improvements in how we measure healthy output.”

Service industries grew 0.3% in August, rebounding from a 0.1% decline in July, while manufacturing expanded 0.5% after July’s 0.6% decline.

Total production rose 0.8%, accelerating from July’s 0.3% rise, as crude oil and natural gas extraction rebounded after the temporary shutdown of oilfield sites for planned maintenance. Construction continued to contract 0.2%, and is now 1.5% lower than its pre-pandemic level.

In the three months through August, the economy grew by 2.9%, against expectations of 3% growth.

said Paul Dills, chief UK economist at Capital Economics.

The improvement in August may have played a large role in the waning of restrictions from the “July pandemic,” which at one point meant more than a million people were in self-isolation.

And the recent expansion of shortages and the fuel crunch could mean growth has almost come to a standstill since August.

Office for National Statistics (ONS) (ONS)

GDP grew 0.4% in August, but remained 0.8% lower than its pre-coronavirus peak in February 2020:

Services grew 0.3% (0.6% lower than February 2020) Manufacturing grew 0.5% (2.4% lower than February 2020) Construction contracted 0.2% (1.5% lower than February 2020)

➡️ https://t.co/IsnRXaU5wN pic.twitter.com/yvlbOZ2J97

October 13, 2021

Victoria Scholar, Head of Investment at Interactive Investor tweeted:

Victoria Scholar (VictoriaS_ii)

UK August #GDP +2.9% 3m/3m vs. estimates 3% +0.4% M/M v est. 0.5% + 6.9% Y/Y v est. 6.7% service output + 7.3% annual/year vs. 6.2% industrial output + 0.8% M/M vs estimated 0.2% manufacturing output + 0.5% M/M v 0% construction output -0.2% M/M v est + 0.1% Sterling reverses initial rally pic.twitter.com/1elvdCi4rD

October 13, 2021

The Office for National Statistics has also released trade data – we’ll take a closer look in a minute.

Office for National Statistics (ONS) (ONS)

Total imports of essential goods fell by 1.3 billion pounds in August, driven by a 1.2 billion pound drop in imports from countries outside the European Union.

Total merchandise exports fell by £1.3 billion due to a £0.6 billion drop in exports to the EU and a £0.7 billion drop to non-EU countries https://t.co/svM5XjT4Fm pic.twitter.com/cGVR5ghGYs

October 13, 2021

New data in China showed export growth unexpectedly rebounded in September, despite energy shortages, supply bottlenecks and a resurgence of Covid-19 cases. Outbound shipments jumped 28.1% from a year earlier, up from 25.6% growth in August, while economists had expected a decline to 21%. They still expect export growth to slow in the coming months, amid declining global demand for durable goods.

Stocks were mixed in Asia, with Japan’s Nikkei down 0.2%, Hong Kong’s Hang Seng losing 1.4%, Shanghai Composite up nearly 0.3% and South Korea’s Kospi up nearly 1%.

Later today, we will get US inflation data and the minutes of the latest US Federal Reserve meeting.

Agenda

7am BST: UK GDP and Trade 7am GMT: Germany inflation for September (final) 10am GMT: Eurozone industrial production for August 1.30pm GMT: US inflation for September (finally) Expected: 5.3%) 2pm GMT: UK monthly GDP tracker Q3 3.30pm GMT: Bank of England Deputy Governor for Financial Stability Speech, Sir John Cunliffe, 7pm GMT: US Federal Reserve meeting minutes
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