UK Q3 GDP revised up; borrowing surges in November
By Michele Maatouk
Date: Tuesday 22 Dec 2020
(Sharecast News) - UK gross domestic product grew by a record 16% in the third quarter, while government borrowing surged last month, according to figures released on Tuesday by the Office for National Statistics.
The revised GDP growth is up from an initial estimate of 15.5% and means the economy is still 8.6% below where it was at the end of last year, up from an initial estimate of 9.7% below.
Deputy national statistician for Economic Statistics, Jonathan Athow, said: "Today's GDP figures show a broadly unchanged, though slightly stronger picture. Economic output initially fell by around a fifth when the lockdown was imposed in the Spring and then recovered around two-thirds of that lost output through the summer.
"Household incomes grew during the summer as many workers returned from furlough. As expenditure also grew, household saving slowed from last quarter's record level but remains substantially higher than its previous historical peak."
Separate data from the ONS showed that government borrowing rose to £31.6bn in November, compared to consensus expectations of £31.4bn. This was a £26bn increase on November 2019, which is both the highest November borrowing and the third-highest borrowing in any month since monthly records began in 1993.
Ruth Gregory, senior UK economist at Capital Economics, said borrowing will probably remain high over the next few months as Covid-19 restrictions stay in place.
"Of course, Q3 and November are old news," she said. "And the possibility that the new Tier 4 Covid-19 restrictions are extended and broadened in the coming months means that the risks to our Q1 GDP forecast (+1.0% q/q) are weighted heavily to the downside."
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