Recovery on go-slow after it jumped out of recession

THE UK economy rebounded from recession in July to September – but the recovery showed signs of running out of steam weeks before the second coronavirus lockdown came into force.

Growth of 15.5 per cent over the quarter was the biggest ever recorded, said the Office for National Statistics (ONS).

But the economy is still 8.2 per cent below levels seen before the virus struck.

And experts have forecast gross domestic product will fall sharply over the fourth quarter – raising fears Britain may plunge into a double-dip recession.

Chancellor Rishi Sunak (pictured) – whose move to extend the furlough scheme to March 31 next year should limit the economic damage, say economists – warned there were hard times ahead. ‘ Figures show our economy was recovering over the summer but started to slow going into autumn,’ he added.

‘The steps we’ve had to take since to halt the spread of the virus mean growth has likely slowed further since then.’

The data showed growth bounced back from a 19.8 per cent contraction in April to June, which plunged the UK into a record-breaking recession.

But the economic slowdown in September was more severe than expected, and the ONS reported there had been a ‘loss in momentum across all main sectors’ since June.

Bank of England (BoE) governor Andrew Bailey said the figures revealed the ‘huge gap’ between output now and levels seen before the pandemic.

He told a Financial Times event, news of a potential coronavirus vaccine was ‘ encouraging for the economy’ but added there was ‘still a long way to go’.

The BoE last week forecast the economy would shrink by two per cent in the final quarter of the year but pencilled in growth of 2.4 per cent in the first quarter of 2021.

However, some experts predict there will be no signs of a recovery until next spring.

Meanwhile, GDP fell 9.7 per cent yearon-year – twice as big as the falls in Italy, Germany and France, and nearly three times that in the US, reported the ONS.