Economy grows by 1.3 per cent but 'significant challenges ' remain - Chamber

Business leaders today warned “significant challenges ” remain on the horizon despite new figures revealing that the UK economy grew by 1.3 per cent from July to September.

The third quarter expansion slowed down compared to the previous quarter when many Covid restrictions were lifted.

According to the office for National Statistics, gross domestic product (GDP) grew by 0.6 per cent in September but remains 0.6 per cent below its pandemic level.

Services output grew by 0.7 per cent as human health activities grew by 6.4 per cent, mainly because of a large rise in face-to-face appointments at GP surgeries in England.

Output in consumer-facing services fell by 0.6 per cent, largely down to a 13.3 per cent fall in the wholesale and retail trade and repair of motor vehicles and motorcycles. All other services rose by 1.0 per cent.

Consumer-facing services are 5.5 per cent below their pre-pandemic levels, while all other services are now 1.0 per cent above.

Raj Kandola (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “It 's reassuring to see economic activity continued to pick up over the summer and edge ever-closer to the output we saw prior to the onset of the pandemic.

“This uptick in activity was mainly down to the fact that we saw an upturn in consumer spending as national restrictions continued to ease. However, significant challenges remain on the horizon.

“Labour and supply chain shortages are having a noticeable impact on the construction industry whilst the spectre of higher interest rates looms large as the global energy crisis continues to have a visible impact on prices as early analysis from our latest Quarterly Business Report survey suggests.

“The recent Budget contained a number of pro-business policies which are likely to help businesses over the coming months, however, many are still facing an uncertain future.

“In light of this, we would encourage the Government to commit to a plan of financial support for businesses should restrictions be reintroduced in a bid to combat rising case rates over the winter months. ”

Read our response to the Budget here.

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