Britain’s economic recovery is going better than you think

Joseph B. Hash

So what is happening? In the age of Covid the economy moves fast, so each of the three months within one quarter look different.

September heralded a significant step towards a return to normality, as commuter levels rose, doctors saw more patients in-person and long-distance travel was on the up.

It marked a stark contrast to July, when the pingdemic was taking workers away from their jobs and travel was only for the bold – Britain’s “freedom day” to mark the end of many restrictions only happened half way through the month. 

The quarterly figure therefore combines very different months, yet September’s figure uses only the strongest period.

Secondly, the numbers can be revised when more data comes in: figures for July and August were changed from their initial estimate, undermining the overall quarterly figure.

Finally, there are three different ways to measure economic activity – by output, expenditure, and income. Monthly GDP looks only at output, which is measured with rapid surveys, but quarterly GDP later combines output with expenditure and income measures that take longer to compile.

And differences between the ways to measure are stark: compared with the pre-Covid era, the economy is 1.1pc smaller on output, 2.1pc on expenditure and 3pc on income.

There are also longer term challenges that prove data collection to be hard, and even harder amid the pandemic. Face-to-face surveys were off the agenda and goods were missing from shelves, making it difficult to collect prices, while shuttered restaurants and international travel stifled entire industries. 

Adapting at a fast pace, Covid statisticians acted fast, changing the weightings in the consumer price index to reflect new spending patterns. It normally takes several years to assess structural changes in the economy.

Still, UK GDP in the third quarter was down 2.1pc compared to pre-Covid levels. That is worse than any other G7 nation, with Germany down 1.5pc and Italy 1.4pc. France is almost back to its old level, with its economy just 0.1pc short, while the US leads the pack with an economy 1.4pc bigger than it was in the final quarter of 2019.

Next Post

Clarks accuses striking factory staff of hurling homophobic abuse

Striking workers at Clarks have been accused of shouting homophobic abuse at staff and attempting to damage cars as Britain lurches into a winter of discontent. Picketers scattered nails across the road to be run over by traffic outside Clarks’ factory in Somerset and a striker shouted “take that, gay […]

Subscribe US Now