LONDON (Reuters) – Britain’s economy grew for a third month in a row in July as pubs, restaurants and other sectors reopened after the coronavirus lockdown, but it remained around 12% smaller than its pre-pandemic level.
After crashing by a record 20% in the second quarter, output expanded by 6.6% in July, slower than June’s monthly rate, the Office for National Statistics (ONS) said.
Economists polled by Reuters had expected growth of 6.7%.
Finance minister Rishi Sunak welcomed the figures but added that people were rightly worried about the coming months.
The economy has recovered about half of its lost output but is still 11.7% smaller than its level in February, before the pandemic hit Britain.
Thomas Pugh, an economist with Capital Economics, said the data suggested British GDP would show record-breaking growth in the third quarter after its unprecedented collapse in the April-June period.
“However, July was probably the last of the big step-ups in activity and a full recovery probably won’t be achieved until early 2022,” he said.
In response, the Bank of England was likely to ramp up its bond-buying stimulus programme by a third, or 250 billion pounds ($320.38 billion), Pugh said.
Britain’s economy suffered the sharpest second-quarter fall of any Group of Seven nation in the April-June period.
BREXIT RISKS BACK
Hopes for a swift rebound have faded as businesses struggle to cope with social distancing rules and many people remain reluctant to travel on public transport or go to crowded places.
Tensions between London and Brussels over a post-Brexit trade deal are also mounting.
Furthermore, unemployment is expected to rise sharply because Sunak has ruled out extending his coronavirus job retention scheme which is due to expire at the end of October.
Parliament’s Treasury Committee on Friday urged Sunak to “carefully consider” a targeted extension of the scheme and other support measures.
The pound fell slightly against the dollar as Friday’s data showed output in Britain’s dominant services sector was a bit weaker than expected, growing by 6.1% in July against expectations for growth of 7.0%.
This included a 141% jump in accommodation and food as lockdown measures eased, but that sector’s output was still 60% lower than its February level.
Growth in the much smaller manufacturing and construction sectors exceeded forecasts.
Complicating the outlook, Brexit risks have resurfaced.
The European Union told Britain on Thursday it should scrap a plan to breach their divorce treaty, but Prime Minister Boris Johnson’s government refused and pressed ahead with a draft law that could sink four years of talks.
We are far from out of the woods yet,” Tom Stevenson, Investment Director, Personal Investing, at Fidelity International said, pointing to rising COVID-19 infections, new rules on social gatherings and the end of the furlough scheme.
“Deteriorating relations with the EU make a no-deal Brexit in January more likely, adding to the UK’s economic challenges and to downward pressure on the pound.”
($1 = 0.7803 pounds)
(Reporting by Andy Bruce and Paul Sandle; Editing by William Schomberg and Alex Richardson)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
