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IEA responds to ONS GDP figures for Q2

Julian Jessop, Economics Fellow at free market think tank the Institute of Economic Affairs, commented on ONS GDP figures for Q2 2021

“The pickup in UK economic growth in June is reassuring after the recovery appeared to falter in May. With Covid restrictions eased further since, and the ‘pingdemic’ permitting, GDP is on course to return to pre-pandemic levels by the Autumn. This would be much sooner than most had expected.

“The Chancellor should therefore continue to wind down support that is no longer required, including the furlough scheme, and allow stronger growth to repair the public finances without even more tax increases.

“The main headwinds are now coming from problems on the supply side, including shortages of parts and raw materials, which are holding back manufacturing and construction. These are global problems (Germany has actually been hit harder than the UK) and should ease over time. But these emerging capacity constraints also strengthen the case for central banks to end money printing sooner rather than later.”

Notes to editors

Contact: Emily Carver, Head of Media, 07715942731

GDP first quarterly estimate, UK: April to June 2021

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