UK | The economy continues to claw back Covid losses
The UK economy made more progress in August in returning to its pre-Covid size. But supply-side friction and pressure on spending power from higher inflation point to a more sluggish growth period ahead.
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Still, as the recent very strong set of labour market numbers demonstrates, the recovery is far from out of steam.
Meanwhile, comments from MPC members suggest that opinions over future policy direction remain split. Upward revisions to Q2’s national accounts had left the economy closer to its pre-crisis size than initially thought.
Last week’s GDP release for August saw that gap narrow further. In August, the first full month after most remaining domestic Covid restrictions were lifted on July 19, output rose 0.4% m/m.