The arrival of ‘freedom day’ on 19 July enabled people to return to concerts, festivals, and ditch social distancing, but these rediscovered freedoms did not revive the economy. The ONS said this morning that growth was just 0.1 per cent in July, far lower than the consensus forecast. It was particularly disappointing given the growth seen in the locked-down months of June (one per cent) and May (0.6 per cent). The Pingdemic – and concerns about the Delta variant – cancelled out any animal spirits around reopening.
August’s GDP boost is going to need to be much stronger for the more bullish forecasts to pan out
Nightclubs reopened and the entertainment sector was up nine per cent, but the end of stamp duty hit real estate. Capital Economics attributes the stagnation to rising Covid cases and the ongoing pain caused by labour shortages (more on that here). These are factors that are not obviously set to change in the coming months.
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