UK economy rebounds slower than expected in Q3

Britain’s economy grew by a record 15.5% in the third quarter, compared to the previous three months’ 19.8% contraction, while a monthly figure showed 1.1% growth in September, compared to 2.1% in August.

The data, which came before the latest restrictions on businesses, show slower than expected rebound as the economy struggles to maintain its recovery from the crash, caused by coronavirus lockdown, with both figures coming below expectations (Q3 15.5% q/q vs 15.8% f/c and Sep m/m 1.1% vs 1.5% f/c).

Britain’s economy suffered the biggest drop among world major economies, despite being boosted by over 200 billion pounds worth emergency spending and tax cuts and BOE’s bond-buying program which has been extended to almost 900 billion pounds.

The Bank of England expects  the UK economy to shrink by a record 11% in 2020, before the recovery starts to pick up, with projections for 7% growth in 2021, as fresh expectations for potentially effective Covid-19 vaccine raised hopes for possible stronger than estimated rebound.

BOE’s Governor Andrew Bailey said that UK GDP data were in line with central bank’s expectations and expressed optimism as vaccine news start to reduce weight of uncertainty.