Market news

12 August 2021

UK economy grew by 4.8% in Quarter 2 - ONS

According to the report from Office for National Statistics, UK gross domestic product (GDP) is estimated to have increased by 4.8% in Quarter 2 (Apr to June) 2021, following the easing of coronavirus (COVID-19) restrictions. Monthly estimates show that GDP increased across all three months at 2.2% in April, 0.6% in May and 1.0% in June 2021. Economists had expected a 0.8% increase in June. 

There was an increase in services output of 5.7% in Quarter 2 2021, having contracted by 2.1% in Quarter 1 (Jan to Mar) 2021. Services output is now 3.5% below Quarter 4 (Oct to Dec) 2019 levels. Wholesale and retail trade, accommodation and food service activities, and education provided the largest quarterly contributions to services output growth. Production output rose by 0.5% in Quarter 2 2021, following a fall of 0.5% in the previous quarter, and remains 3.3% below its pre-coronavirus pandemic level. The increase in production output in Quarter 2 2021 was driven mainly by a 1.8% rise in manufacturing, in particular that of food products, beverages and tobacco, and machinery and equipment. Construction output increased by 3.3% in Quarter 2 2021, reflecting a rise in new work (3.7%), particularly infrastructure, and repair and maintenance (with growth of 1.7%). Construction has now nearly recovered to pre-pandemic levels, with output in Quarter 2 2021 at 0.6% below Quarter 4 2019 levels.

In output terms, the largest contributors to GDP increase in Quarter 2 were from wholesale and retail trade, accommodation and food service activities, and education.

The level of GDP is now 4.4% below where it was pre-coronavirus pandemic at Quarter 4 (Oct to Dec) 2019.

In Quarter 2 2021, there were increases in nearly all main components of expenditure apart from "trade", with the largest contribution from household consumption, which contributed 4.1 percentage points to the 4.8% increase following the easing of coronavirus restrictions in Quarter 2 2021 compared with Quarter 1 (Jan to Mar) 2021.

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