UK GDP grew less than expected in September

According to the report from Office for National Statistics, monthly gross domestic product (GDP) grew by 1.1% in September 2020 as lockdown measures continued to ease. This is the fifth consecutive monthly increase following a record fall of 19.5% in April 2020. Economists had expected a 1.5% increase.

September 2020 GDP is now 22.9% higher than its April 2020 low. However, it remains 8.2% below the levels seen in February 2020, before the full impact of the coronavirus (COVID-19) pandemic. There has also been a loss in momentum through Quarter 3 (July to Sept) 2020.

GDP grew by 15.5% in Quarter 3 (July to Sept), following two consecutive quarterly falls but has not recovered to pre-pandemic levels

The services sector grew by 1.0%, production by 0.5% and construction by 2.9% in September 2020, however, it is important to note that since the peak monthly growth in June, growth in GDP and its main sectors has slowed.

Looking ahead, results from Wave 16 of the Business Impact of Coronavirus (COVID-19) Survey (BICS), which covered the dates 5 to 18 October 2020, found that of businesses currently trading, 45% reported their turnover had decreased below what is normally expected for October, compared with 48% reporting decreases in September in Wave 15.

In October, there were three industries where more than 50% of businesses experienced a decrease in turnover, compared with 45% across all industries. These were the accommodation and food service activities industry, at 72%; the arts, entertainment and recreation industry, at 69%; and the education industry (private sector and higher education businesses only), at 57%.