Blog: UK growth slows to a crawl as Brexit and pandemic pressures weigh – HeraldScotland

UK economic output rose by just 0.1 per cent in July – way adrift of a forecast 0.5% increase and the slowest monthly advance recorded this year – and experts warned of a continuing drag from labour shortages and supply-chain disruption.

The sharp slowdown during July in growth of UK gross domestic product – which had increased by 1% in June – was revealed in figures published yesterday by the Office for National Statistics. It came against a backdrop of labour and skills shortages and supply-chain woe, attributed by industry bodies, businesses, and experts to Brexit and the self-isolation “pingdemic”.

The data showed UK GDP in July was down 2.1% on its pre-pandemic level in February 2020.

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CBI lead economist Alpesh Paleja said: “Labour shortages and supply-chain disruption have continued since, and are likely to have taken the edge off growth as we head into autumn. Businesses hope the bulk of supply disruption will prove temporary, but firms are not confident that all shortages will fade any time soon.

“To help ease these pressures, temporary, targeted interventions are needed to enable businesses to keep their doors open – for instance, placing HGV (heavy goods vehicle) drivers on the shortage occupation list could make a real difference.”

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Production output rose 1.2% month-on-month in July, boosted by the “reopening of an oil field production site which was previously temporarily closed for planned maintenance”, the ONS noted. Construction contracted for a fourth consecutive month in July, with its output falling 1.6%, to be 1.8% below its pre-pandemic level.

Services output was flat month-on-month in July, and 2.1% below its February 2020 level. Output of the arts, entertainment and recreation activities category grew 9% in July, boosted by sports clubs, amusement parks and festivals, and reflecting the easing of restrictions, the ONS said. Output of consumer-facing services declined by 0.3% in July.

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