UK economy grew by record 16% in Q3 after first lockdown slump

FILE PHOTO: A woman feeds birds on the bank of the river Thames with London's financial district seen in the background, amid the coronavirus disease (COVID-19) in London
FILE PHOTO: A woman feeds birds on the bank of the river Thames with London's financial district seen in the background, amid the coronavirus disease (COVID-19) in London, Britain, November 25, 2020. REUTERS/Simon Dawson/File Photo

December 22, 2020

LONDON (Reuters) -Britain’s economic recovery from its coronavirus crash was a bit quicker than previously thought in the July-September period, according to official data which also showed government borrowing soaring to pay for the coronavirus crisis.

Gross domestic product grew by a record 16.0% in the third quarter – revised up from a previous estimate of 15.5% – but that still did not make up for its 18.8% slump in the April-June period when much of the economy was shut down.

The Office for National Statistics also said Britain borrowed a record 241 billion pounds ($323 billion) in the first eight months of the financial year, nearly 190 billion pounds more than in the same period a year earlier.

The country’s budget forecasters think the deficit will hit almost 400 billion pounds in the 2020/21 year, close to 20% of GDP or double the hit from the global financial crisis.

Public debt stood at almost 2.1 trillion pounds or 99.5% of annual economic output, the highest debt-to-GDP ratio since 1962, the ONS said.

Finance minister Rishi Sunak reiterated his pledge to tackle the huge shortfall, but not immediately.

“When our economy recovers, it’s right that we take the necessary steps to put the public finances on a more sustainable footing so we are able to respond to future crises in the way we have done this year,” he said in a statement.

($1 = 0.7462 pounds)

(Reporting by Andy BruceWriting by William Schomberg)