David Milliken

LONDON (Reuters – Britain’s economic growth was 0.4% in August. That is just 0.8% more than what it was in February 2020 just before it entered its first COVID-19 lockdown.

Reuters polled economists to forecast August’s 0.5% monthly growth in gross domestic product.

The July GDP report was revised to reflect a 0.1% decrease in growth, however other data revisions from earlier this year bring the economy closer to pre-pandemic levels than the previous set of monthly GDP data.

According to the Bank of England, it is likely to become the largest central bank in the world to raise interest rates. The financial markets expect a rise of 0.25% in December.

The UK’s economy contracted by 9.7% in 2020. This was the joint-greatest decline in over 300 years, matching its annual fall in 1921 when it was still recovering from World War One.

On Tuesday, the International Monetary Fund predicted that Britain would experience 6.8% annual growth, which is the fastest of any G7 country. But, due to last year’s severe slump, it may take longer than its peers to recover.

The first half of 2012 saw rapid growth in Britain’s economy, thanks to the quick rollout of COVID-19 vaccinations. Lockdown restrictions were then lifted.

However, this trend has been slowing since mid-year because of a number of Delta cases and supply chain problems worldwide. These difficulties have been made worse by the new post-Brexit trade restrictions.

Wednesday’s data indicated that August saw a rebound in monthly growth after the July drop – which was when Delta had the greatest impact on staff absence – however, the growth rate for the period to August was 6.9%. Analysts predicted a slowerdown of 6.7%.