World News | UK ''no Longer the Laggard'' of G-7 Economies After Upgrades

London, Sep 30 (AP) The British economy is no longer the worst performing Group of Seven economy after second quarter growth was revised higher to reflect a bigger than foreseen increase in consumer spending following the lifting of lockdown restrictions.

The Office for National Statistics said Thursday that the UK's economic output increased by 5.5 per cent in the April to June period from the previous quarter, up on the previous estimate of 4.8 per cent. The agency said the economy also contracted by less than thought in the first quarter — 1.4 per cent against 1.6 per cent.

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The changes mean that the British economy has gotten nearer to clawing back the 9.7 per cent shrinkage it experienced last year after the coronavirus pandemic struck and prompted widespread curbs on everyday life. At the end of the second quarter, the economy was 3.3 per cent smaller than it was at the end of 2019, the last full quarter before the pandemic had an impact.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the upgrades mean the British economy is “no longer the laggard” among the Group of Seven leading industrial nations.

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As a result of Thursday's upgrades, the UK has leapfrogged Italy, which remains 3.8 per cent smaller than before the pandemic. Its shortfall is identical with Germany's and just worse than France's 3.2 per cent. Of the seven major industrial nations, only the US has an economy bigger than it was before the pandemic.

The biggest driver of Britain's upward revision in the second quarter was household spending, which contributed four percentage points of the 5.5 per cent increase. The country's pandemic restrictions were eased in April to allow outdoor and lifted in May.

The hard-hit hospitality sector did particularly well, benefiting further from the rescheduling of soccer's 2020 European Championship, which saw England advance to the final.

Though recent surveys suggest that growth has slowed since the end of the second quarter, there are hopes that the economy may be back at its pre-pandemic level by the end of 2021 or early next year.

Economists cautioned that recent supply chain issues, which are partly blamed on labor shortages related to Britain's departure from the European Union, are set to curtail growth in the fall.

The problems confronting the economy have been particularly evident over the past week. A shortage of truck drivers, tens of thousands of whom left the UK after Brexit, led to panic-buying of fuel and long lines at filling stations. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)