The UK’s economic growth has slowed sharply due to supply chain issues
Due to supply chain disruptions hitting the manufacturing and construction industries, while the service sector’s expansion slowed, the British economy barely grew in October.
Data released by the UK National Bureau of Statistics on Friday showed that UK output grew only 0.1% from September to October.
This is lower than the 0.4% forecast by economists surveyed by Reuters and a sharp drop from the 0.6% expansion last month.
Grant Fitzner, chief economist at the National Bureau of Statistics in the United Kingdom, said that the UK’s health sector has grown strongly, and used car sales and employment agencies have also boosted the economy.
He pointed out: “In general, the dominant service industry reached pre-pandemic levels for the first time in 20 months.” However, he added that these gains were offset by a reduction in restaurant activity, which has experienced a After a strong summer, there was a fall, as well as a decline in oil extraction and natural gas use.
The construction industry experienced its biggest decline since April last year, with significant declines in housing construction and infrastructure, partly due to shortages of raw materials.
Due to widespread supply chain disruptions and shortages of goods and workers, production output fell by 0.6%, and the construction industry fell by 1.8%.
Service output increased by 0.4% in October, with the largest contribution coming from health activities, mainly due to the continuous increase in face-to-face appointments at general practitioner clinics in England.
Overall, in February 2020, before the pandemic, output in the UK was still 0.5% lower than in 2020.
CBI Chief Economist Alpesh Paleja stated that “the disappointing growth in October has heightened concerns about the impact of the UK’s economic recovery on the resilience of the Omicron variant and further restrictions”.
This is the last UK GDP data before the Bank of England’s interest rate decision next week. Economists expect the bank to postpone rate hikes due to concerns about the spread of the Omicron variant of the coronavirus.