Britain's lacklustre economic growth in August caught out economists that were expecting a much healthier recovery on the back of Rishi Sunak’s much-lauded Eat Out to Help Out campaign.
The dining discount scheme, which saw more than 100 million meals claimed through the government programme, set the government back £522 million. It was designed to encourage the UK population to spend heavily and set the country on track for the perfect V-shaped bounce back, where a recession and subsequent recovery resemble a V-shape on an economic chart.
Instead, gross domestic product grew by a less-than-expected 2.1 per cent in August from July, disappointing analysts that were expecting a 4.6 per cent rise in output and ruling out the V-shaped recovery altogether.
“It appears gains are harder to come by as we stretch further into the recovery, with today’s reading highlighting the lack of a ‘V’ shaped recovery,” said Josh Mahoney, senior market analyst at online trading company IG. “Instead, the best we can hope for is a lopsided, tick-shaped growth trajectory, with the possibility of a second nationwide lockdown highlighting that even such a drawn-out process could be optimistic.”
Economists were optimistic of a straightforward recovery after bumper growth in June of 9.1 per cent, followed by a 6.4 per cent rise in July – a move in the right direction when set against the record contraction of 19.5 per cent in April when the UK was in full lockdown.
Rishi Sunak’s dining discount scheme was then expected to deliver another “impressive month of growth” as residents emerged from their homes to cash in on the government-funded price reduction of 50 per cent on their meal, up to £10 per diner.
The scheme saw a significant rise in the number of people eating at restaurants and cafes, with data from OpenTable showing that restaurant reservations rose by 53 per cent compared with Monday-to-Wednesdays in August 2019, according to the Centre for Economics and Business Research (CEBR).
While the scheme’s success is reflected in the August GDP reading, with output in the accommodation and food services sector growing 71.4 per cent from July, other sectors showed weaker growth. There was only a modest increase in manufacturing output of 0.7 per cent and travel, arts and entertainment dragged down the service sector.
When the ONS released the GDP figures on Friday morning, the UK finance minister was quick to issue a statement on the results, conceding “that many people are worried about the coming winter months”.
Some analysts expect more of a sideways move in the shape of the recovery, with the unwinding of the government’s fiscal support worsening prospects for the next few months.
“We expect the new Covid-19 restrictions to mean that the economy does little more than move sideways in the final three months of the year, leaving economic activity marooned 7.5 per cent short of its pre-crisis level,” said Ruth Gregory, senior UK economist at Capital Economics.
“So while the economy has recouped 64 per cent of the fall in GDP in four months, it may take until late-2022 to get back the remaining 36 per cent. That’s why we think the Bank of England will yet expand Quantitative Easing by a further £250 billion by the end of next year, with the next tranche of £100bn coming this November.”
Looking ahead to the coming quarters, Josie Dent, managing economist at CEBR, expects quarterly growth to slow, falling to just 0.4 per cent in the first quarter of 2021 with output not returning to pre-crisis levels until the mid-2020s.
With the economy “not out of the Covid-quagmire yet”, some analysts say on face-value the rise in August indicates that the fabled ‘V-shaped’ recovery is still on track.
“However, this growth is likely to be reversed in the next quarter with temporary hospitality closures sweeping across Scotland and many parts of England due to rising Covid-19 cases, naturally resulting in waves of redundancies,” said Richard Pearson, director at investment platform EQi.
“With the threat of local lockdowns looming over consumers’ heads and hospitality redundancies on the horizon, consumers aren’t going to dance the night away in the coming months."
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
OIL PLEDGE
At the start of Russia's invasion, IEA member countries held 1.5 billion barrels in public reserves and about 575 million barrels under obligations with industry, according to the agency's website. The two collective actions of the IEA this year of 62.7 million barrels, which was agreed on March 1, and this week's 120 million barrels amount to 9 per cent of total emergency reserves, it added.
The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
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Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
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Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
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Sreesanth's India bowling career
Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
Desert Warrior
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
