UK economic growth held back by supply chain problems

Nov 11, 2021, 2:22 AM | Updated: 7:55 am

LONDON (AP) — The British economy slowed down during the third quarter of the year as widespread supply chain problems hobbled the recovery from the coronavirus pandemic, official figures showed Thursday.

The Office for National Statistics said the economy grew by 1.3% between July and September from the previous three-month period, with the health sector and housing market particularly buoyant. The increase was slightly below market expectations and lower than the second quarter’s 5.5% boost.

The third-quarter result means the British economy remains 2.1% below where it was before the pandemic struck in March 2020.

Though the British economy is widely forecast to grow faster than other leading economies this year, that’s largely because it experienced the biggest downturn in 2021, when it shrunk by nearly 10%, the country’s deepest recession in around 300 years.

As a result, the British economy remains the laggard among the Group of Seven economies. The United States is the only G-7 economy to be bigger than it was at the outset of the pandemic, according to the statistics agency. Official figures elsewhere show that France is nearly back at its pre-pandemic level, while Germany, Europe’s largest economy, is around 1% smaller.

Last week, the Bank of England said the economy would not gain back the output lost during the pandemic until the first part of next year after previously predicting a recovery by year’s end.

Over the summer, Britain witnessed an array of supply chain problems tied to disruptions caused by the pandemic and Britain’s departure from the European Union. That was evident in the recent long lines seen at gas stations amid a shortage of truck drivers.

The statistics agency said car sales, in particular, have been hit by a shortage of computer chips, while construction projects were delayed amid difficulties in getting materials.

Debapratim De, senior economist at Deloitte, said “weakness in consumer-facing services, despite minimal social distancing restrictions over the summer, and a contraction in industrial production, highlight that parts of the economy continued to be blighted by the paucity of labor and raw materials.”

Rate-setters at the Bank of England appear to want to raise interest rates soon to keep a lid on rising consumer prices tied to supply chain problems, high energy prices and other factors tied to the global recovery from the pandemic. The annual rate of inflation is running at 3.1%, higher than the bank’s target of 2%, and is expected to edge higher toward the 5% mark in coming months.

The majority of policymakers at the central bank said last week that they wanted to see how the job market was holding up after the end of a government program that subsidized salaries during the pandemic before increasing the bank’s benchmark rate from a record low 0.1%.

For much of the time the program was in place, the government paid 80% of the salaries of employees unable to work because of lockdown measures. At its peak, it helped support over 11 million people, but with many workers returning to their jobs after pandemic restrictions lifted, that fell to a little more than 1 million at the end of the program in September.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Then-Supreme Court Justice Stephen Breyer speaks during an event at the Library of Congress ...
Associated Press

Breyer, Gorsuch join to promote education about Constitution

WASHINGTON (AP) — Recently retired Supreme Court Justice Stephen Breyer has become the honorary co-chairman of a nonpartisan group devoted to education about the Constitution, joining Justice Neil Gorsuch at a time of intense political polarization and rising skepticism about the court’s independence. The National Constitution Center in Philadelphia said Thursday that Breyer and Gorsuch, […]
6 hours ago
Ukraine's President Volodymyr Zelenskiy speaks via video-link at a donor conference for Ukraine hel...
Associated Press

Ukraine wants donors to give more money to ‘stop Russia’

COPENHAGEN, Denmark (AP) — Ukrainian President Volodymyr Zelenskyy called on Western nations Thursday to provide more money to help Ukraine’s military keep fighting nearly 5½ months after Russia invaded its neighbor. “The sooner we stop Russia, the sooner we can feel safe,” Zelenskyy said while addressing defense leaders at a Denmark conference aimed at strengthening […]
6 hours ago
FILE- Philippine President Ferdinand Marcos Jr. delivers his first state of the nation address in Q...
Associated Press

Philippine leader threatens to fire officials in sugar mess

MANILA, Philippines (AP) — The Philippine president has threatened to fire top agricultural officials if an investigation shows they improperly announced a decision to import sugar amid a shortage without his approval, his press secretary said Thursday. It’s the stiffest punitive step newly elected President Ferdinand Marcos Jr. could take against officials over an apparent […]
6 hours ago
Associated Press

Don’t bank on your business to fund your retirement

Retirement can loom like a dark cloud for small-business owners. Many invest blood, sweat and tears — and every penny — into building their business but never set cash aside for the future. A huge number of entrepreneurs have reported putting aside no retirement savings at all. For some, selling the business is their only […]
6 hours ago
Associated Press

Indiana officer critically wounded in traffic stop shooting

RICHMOND, Ind. (AP) — An eastern Indiana police officer was critically wounded and a man was injured in a shootout following a traffic stop and search for possible narcotics, authorities said. Richmond Police Department Officer Seara Burton responded to a call about 6:30 p.m. Wednesday from other officers to assist with the stop involving a […]
6 hours ago
Follow @ktar923...
Sponsored Content by Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a functioning HVAC unit can be critical.

Sponsored Articles

...
Sanderson Ford

Don’t let rising fuel prices stop you from traveling Arizona this summer

There's no better time to get out on the open road and see what the beautiful state of Arizona has to offer. But if the cost of gas is putting a cloud over your summer vacation plans, let Sanderson Ford help with their wide-range selection of electric vehicles.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
UK economic growth held back by supply chain problems