interactive investor comments on latest UK GDP figures
13th October 2021 14:07
by Jemma Jackson from interactive investor
England was free of Covid restrictions in August.
Commenting on the latest GDP figures, Victoria Scholar, Head of Investment, interactive investor, says: “August was the first full month without Covid restrictions in England. The UK’s monthly GDP figure fell slightly short of analysts’ expectations, growing 0.4% month-on-month, while July’s figure was revised lower from +0.1% to -0.1%. Domestic holidays helped drive the 23% month-on-month growth for hotels and campsites, along with the resurgence in arts and entertainment. July’s pingdemic when millions were self-isolating also flattered the month-on-month growth figure.
“However, construction declined by 0.2% month-on-month, shrinking for the fourth month in a row on the back of shortages of raw materials and workers. All sectors of the economy are still smaller than before the pandemic, with consumer-facing services around 5% below their peak. Pressure remains on the UK economic outlook with the cost-of-living crisis, above-target inflation and rising Covid cases.
“This week the IMF downgraded its outlook for full-year UK GDP, forecasting growth of 6.8%, below the Bank of England’s own projection for 7.25%. Yet market expectations are rising for a rate hike in December from the Bank of England to temper rising price levels. October has seen a turnaround for the pound after a four-month stretch of declines with today’s data modestly supportive for GBP, which has broken back above $1.36 and has gained almost 1.5% month-to-date.”
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.