Chancellor Sunak’s eat out to help out scheme not enough to turn the tide as economic recovery slowed down in August
The pace of the UK'S economic recovery from the Covid- 19 pandemic has slowed considerably and is far below what experts had hoped for, new figures show.
Gross National Product ( GDP) was up by 2.1 per cent during August, according to data from the Office for National Statistics ( ONS).
It was the fourth consecutive month of growth, after the economy took a serious hit during the depths of the Covid- 19 pandemic.
But it is less than half of what experts had expected, and a major slowdown since July.
Analysts expected that GDP would increase by 4.6 per cent, according to a consensus taken by Pantheon Macroeconomics.
In July, GDP was up by 6.4 per cent, and in June it rose by 9.1 per cent, according to ONS data.
The government invested hundreds of millions of pounds to get the economy back on its feet in August, including promising to pay for half a restaurant bill during parts of the month.
It was largely this scheme, and other government initiatives, that encouraged growth across the month, said Suren Thiru, head of economics at the British Chamber of Commerce.
The accommodation and food service sectors contributed 1.25 percentage points of August's growth in GDP.
"The increase in activity in August largely reflects a temporary boost from the economy reopening and government stimulus, including the Eat Out to Help Out scheme, rather than proof of a sustained ' V'- shaped recovery," he said.
It is now vital that the government is ready to help companies through what will prove to be a "difficult winter," Thiru added. This will need measures "beyond the Chancellor's recent interventions".
Labour shadow chancellor Anneliese Dodds said: "If the Chancellor doesn't act, we risk a devastating spike in unemployment that will choke off the recovery as we head into winter."
Business minister Nadhim Zahawi said 2020 "is going to be a difficult year".
He told BBC Breakfast: "This is a really tough year economically.
"The Chancellor has put around £ 190 billion into the economy to protect jobs ."