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Wednesday, September 29, 2021

UK posts ‘measly’ growth in July amid fears of stalled recovery

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LONDON — The coronavirus and supply chain shortages caused the U.K. economy to grow by a mere 0.1 percent in July, according to Office for National Statistics data published on Friday.

U.K. output in July was 2.1 percent below its pre-pandemic peak, according to analysts from the agency. Services and construction were particularly hard hit as millions of people were asked to self-isolate or were infected with COVID-19. For the month, those sectors had zero growth and a 1.6 percent contraction, respectively.

The “measly” growth figure shows that “the economic recovery has stalled,” said Capital Economics, a consultancy, in a client note.

 “Stalling GDP and rising inflation will leave a whiff of stagflation in the air,” the note added, referencing the mix of unemployment, lack of overall growth and the expectation of more price hikes ahead.

The Labour party’s shadow chief secretary to the Treasury, Bridget Phillipson, blamed the disappointing numbers on the government. “The Conservatives are simply not ambitious enough about the future of our economic recovery,” the MP said.

“The Government has no plan, other than to [plow] ahead with a tax on jobs as well as a devastating cut to Universal Credit, taking money out of our high streets just when it is needed most,” she said, referring to this week’s hike of “national insurance” taxes.

For his part, Chancellor Rishi Sunak downplayed the data. “Our recovery is well underway thanks to the success of the vaccination rollout and the roadmap,” he said.

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Matei Rosca

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