Britain’s economic recovery from the shock of the COVID-19 pandemic has accelerated, data showed Friday, but government borrowing topped the £ 2 trillion mark and fears of loss of future jobs increase.
Retail sales topped pre-pandemic levels in July, the first full month for many stores to reopen after the lockdown, and August purchasing managers index (PMI) data showed fastest growing in almost seven years.
But the UK economy is still facing a long recovery after falling a record 20% in the second quarter, the biggest drop of any major country.
“The UK is still seeing a V-shaped rebound in activity. But… a hot summer can quickly turn into a cold autumn, ”said HSBC economist Liz Martins, pointing to an easing of business activity in the euro area as coronavirus cases start to rise again.
Retail sales in July were 1.4% above levels a year ago and 3.0% above their pre-pandemic level, the Bureau of National Statistics said.
August’s preliminary composite PMI, which covers most non-retail companies, reached its highest level since October 2013.
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But employers are increasingly planning to cut jobs and lay off staff rather than returning them from a government-subsidized leave program that expires in October.
“The scars of the pandemic and lingering doubts about the sustainability of the recovery have driven the need to cut overheads,” said Tim Moore, chief economic officer at IHS Markit, which compiles PMIs.
The Bank of England forecasts unemployment to hit 7.5% by the end of the year, nearly double its last reading.
Meanwhile, the Confederation of British Industry said manufacturing orders were “seriously depressed”, with little improvement in August.
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