Sharp growth slowdown and hard winter ahead shows why policy must support the Covid recovery  

Responding to the latest ONS GDP figures today (Thursday), which show that the economy grew by 0.6 per cent in September, and by 1.3 per cent in the third quarter of 2021, leaving the UK with the largest shortfall in GDP relative to its pre-pandemic peak among G7 countries, James Smith, Research Director at the Resolution Foundation, said:

“Today’s GDP data show that combined growth in July, August and September was no better than its pre-financial crisis average, leaving the UK economy furthest from its pre-pandemic level among G7 countries. This slowdown is taking place despite social distancing restrictions being removed in July, suggesting that supply-chain disruptions and shortages have derailed the recovery.

“The sharp growth slowdown and the prospect of a winter living-standards ‘crunch’ providing a further headwind in the coming months mean that we are not out of the pandemic woods yet. That is why the Chancellor was right to provide more support for the economy at the Budget, and the Bank of England did not raise interest rates last week.”