UK GDP rebounds in Q2 as the economy re-opens - UK GDP grew by 4.8% q/q in Q2 (after falling by -1.6% in Q1). This left the economy 4.4% smaller than it was pre-COVID (2019 Q4).
Pace of recovery likely to have peaked - however, GDP figures for July disappointed expectations, with the economy growing by just 0.1% over the month. Nonetheless, anecdotes and survey data point to underlying demand remaining strong. Recent forecasts point to Q3 GDP coming in around 2.2% for the quarter as a whole which, despite marking slower growth than Q2, remains strong by historical standards.
Recovery impacted by labour and supply shortages - CBI survey data points to stock adequacy in the distribution and manufacturing sector reaching record lows in recent months, with global supply chain disruption the likely cause. Member intelligence also suggests that many firms are dealing with labour shortages.