Economy’s recovery slows sharply despite Eat Out to Help Out boost

Linda J. Dodson

The economy’s recovery slipped in August even as Rishi Sunak’s dining discount provided much-needed relief for restaurants.

GDP rose by a much slower-than-expected 2.1pc compared to July, a fourth consecutive month of expansion following the record collapse in output during lockdown, according to the Office for National Statistics.  

The economy is still almost a tenth smaller than its pre-virus levels but the outlook has deteriorated in recent weeks as a second wave strikes the UK. It marked a sharp slowdown from the 6.6pc growth in July and well below economists’ estimates of a 4.6pc rise.

The hospitality industry helped drive much of the lift thanks to the Eat Out to Help Out scheme. More than 100m meals were served using the scheme at a cost of £522m.

The wider services sector grew by 2.4pc, with nearly two-thirds of the growth coming from accommodation and food services.

However, resurgent Covid-19 cases and tightening local restrictions are expected to put the economy back over the coming months.

The hospitality industry has warned it could face hundreds of thousands of job losses in the coming months after a 10pm curfew was imposed and household mixing was banned in some areas.

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