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Julian Jessop responds to record GDP growth

Responding to data from the Office for National Statistics (ONS) showing gross domestic product (GDP) grew by a record 15.5% in the third quarter of this year, IEA Economics Fellow Julian Jessop said:

“The record jump in UK GDP in the third quarter is welcome but activity remains well below pre-Covid levels. The monthly data for September show that large parts of the economy were already stagnating again, even before the second lockdown.

“It is vital that we do three things to help the economy to recover next year.

“First, we must continue to shield businesses and jobs while the new lockdown is in place. The additional cost to the public finances is a small price to pay to prevent much greater damage in the longer term.

“Second, we should move as quickly as possible to lift the nationwide restrictions. The rebound in GDP over the summer – and the still relatively low levels of unemployment even now – show the potential for the UK economy to bounce back, if only markets are allowed to work properly again.

“Third, it is vital that the government resists calls for tax increases to ‘balance the books’ or ‘pay for Covid’, or for increased state intervention long after the lockdown has been lifted.

“Instead, we should focus on growth-supporting measures, including tax simplification, tax cuts, and further deregulation.”

Notes to editors

For media enquiries, please contact Emily Carver, Head of Media, on 07715942731 or ecarver@iea.org.uk.

Julian Jessop is available for interview and further comment.

For further IEA reading on how to boost growth post-Covid, click here.

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.