Forex Trading For Beginners 2021: UK growth slows again in October as rebound stalls

Man walking past a shop that is closing down

The UK economy grew by just 0.4% in October as the recovery continued to slow.

The economy remains well below the size it was before the pandemic began,

the Office for National Statistics (ONS) said.

The UK has been recovering from a record slump earlier this year induced by the first coronavirus lockdown.

But output is expected to shrink again in November after England's second shutdown forced firms to close.

The ONS said there had been some areas of growth during October but the UK economy "still remains around 8% below its pre-pandemic peak".

UK unemployment rate continues to surge

"Public services output increased, while car manufacturing continued to recover and retail again grew strongly," said ONS deputy national statistician Jonathan Athow.

"However, the reintroduction of some restrictions saw services growth hit, with large falls in hospitality, meaning the economy overall grew only modestly."

October was the sixth consecutive month of growth for the UK after the economy contracted by a record 19.5% in April amid the first lockdown.

The economy initially rebounded at a record rate, and grew by 10.2% between August and October compared with the previous three months.

But growth has begun to slow - slipping from 1.1% in September - and the economy remains fragile, with unemployment continuing to surge.

The ONS said the services sector was the hardest hit in October, with growth almost grinding to a halt as pubs and restaurants were hit by the 10pm curfew and tighter restrictions.

Much of England remains subject to such curbs, which is likely to drag on growth into the new year, said the British Chambers of Commerce.

"October's slowdown is likely to be followed by a significant contraction in economic activity in November as the effects of the second coronavirus lockdown are felt, despite the prospect of a temporary boost from Brexit stockpiling," said head of economics Suren Thiru.

"While a vaccine offers real hope, failure to avoid a disorderly end to the [Brexit] transition period or further lockdown restrictions before a mass vaccine rollout is achieved would severely drag on any economic recovery."

What is GDP?

Gross domestic product (GDP) is the sum (measured in pounds) of the value of goods and services produced in the economy.

But the measurement most people focus on is the percentage change - the growth of the country's economy over a period of time, typically a quarter (three months) or a year.

If the GDP measure is up on the previous three months, the economy is growing. That generally means more wealth and more new jobs.

If it is negative, the economy is shrinking.