Pandemic economic recovery slows down

Self-isolating staff, material shortages and a slow down in shop sales saw economic growth slow in July – even as many businesses were allowed to open fully for the first time in months.

The Office for National Statistics (ONS) said that gross domestic product (GDP) rose by 0.1% over the month, a slowdown from the 1% growth in June.

Companies had faced problems with the so-called "pingdemic", material shortages, a slowing in retail sales and even lawyers took a hit because of the house sales slowing as the Stamp Duty holiday tapered off.

ONS deputy national statistician for economic statistics Jonathan Athow, said: "After many months during which the economy grew strongly, making up much of the lost ground from the pandemic, there was little growth overall in July.

"Car production continued to recover from recent component shortages but the service sector saw no growth overall with growth in IT, financial services and outdoor events - which could operate more fully in July - offsetting large falls in retail and law firms."

"Meanwhile, rising costs and shortages of raw materials pegged back the construction sector again."

The construction sector saw output drop 1.6% in July, the ONS said, while retailers saw a 2.5% fall.

One positive sign came from the arts, entertainment and recreation sector, which was boosted by 9% after restrictions on social distancing were lifted from July 19.

Economists had expected a slowdown in GDP growth in July, although this was forecast at 0.5%, and the figures leave GDP still 2.1% behind its February 2020 level.