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IEA - The real ‘news’ today is that the economic recovery accelerated in June
Julian Jessop, IEA Economics Fellow, commented on GDP figures for Q2 2020 published yesterday by the ONS
“The real ‘news’ today is not that the UK fell into recession in the second quarter. That much we already knew. Instead, it is that the recovery that began in May accelerated in June as the lockdown was eased further.
“The fall in GDP in the second quarter was larger in the UK than in most other countries. This partly reflects the relatively large weight on services in the UK economy which are more vulnerable to social distancing restrictions. It also reflects the fact that many other countries started their lockdown sooner and so took a bigger hit than the UK in the first quarter. It does not reflect any lack of support from fiscal or monetary policy, which has already been ample.
“Looking forward, the key to a strong recovery will be the continued lifting of the lockdown – particularly the reopening of schools – and the return of consumer and business confidence. This requires clear and consistent messaging from government and a focus on allowing markets to work properly again, rather than further state intervention.”
Notes to editors
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Julian Jessop is available for interview and further comment.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.
