Why did economic growth in August fall flat?

August should have been a relative boom for the British economy: restrictions were the most relaxed since the Covid crisis began. Businesses in the hospitality and leisure industries were largely allowed to reopen by this point, and public transport guidance changed to allow non-essential workers to return to the office. On top of these liberalisations, schemes like Eat Out to Help Out were brought in to encourage – even subsidise – more economic activity.

Yet growth figures fell flat, increasing by 2.1 per cent – roughly half of what was expected by economists. It appears economic recovery started to stagnate (down from June’s 9.1 per cent and July’s 6.4 per cent) in a month that was primed for growth. To some extent, government schemes paid off: food and accommodation services grew by an astonishing 71.4 per cent. But even this surge was not enough to substantially lift the economy as a whole, as other areas of economy lagged behind.