The British economy grew 4.8 percent in the three months through June, from the previous quarter, as the vast majority of the country’s lockdown restrictions were lifted, the Office for National Statistics said on Thursday.
The economy swung back into growth after a strict winter lockdown, as consumers spent heavily on restaurants, hotels and transport. Retail sales also grew as shops deemed nonessential were allowed to reopen, the statistics agency said. At the end of the quarter, the recovery benefited from the euphoric mood that swept across the country as England’s national soccer team progressed through the Euro 2020 tournament, eventually making it to the final in July.
The education sector was also a major contributor to growth as in-school attendance rates increased. The production of cars was a drag on the economy for a second-consecutive quarter because the industry is still hampered by a shortage of semiconductors. But demand for cars went up when showrooms reopened, raising the price of used cars instead.
In June, gross domestic product edged up 1 percent, the statistics office said. But the overall size of the economy was still 2 percent smaller than it was before the pandemic in February 2020. The recovery briefly went into reverse in the first three months of 2021, when the economy contracted by 1.6 percent.
Recently, there has been evidence that some of this growth momentum has been lost. In mid-July, remaining social distancing restrictions were abandoned in England but the change was unlikely to have added much fuel to the economic recovery because, at the same time, the number of coronavirus cases was rising rapidly as the Delta variant spread. This kept most people working from home instead of offices. Economic indicators that seek to measure the pace of the recovery in real time, using restaurant reservations, credit card spending and retail footfall, have plateaued.
Earlier this month, the Bank of England predicted that in the third quarter the economy would grow by about 3 percent, slightly lower than its previous forecast, as people reduced how much time and money they spent shopping, dining and socializing, either because they were forced to self-isolate or because they were acting more cautiously.
But these factors will only temporarily alter the shape of the recovery. By the end of the year, the economy will have recovered to its prepandemic size, the central bank said.