UK economic growth falls despite ‘Eat Out to Help Out’ scheme

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    LONDON, ENGLAND - AUGUST 02: People dine outdoor at a restaurant in Clapham on August 2, 2020 in London, England. British Prime Minister Boris Johnson has said it is time to "squeeze that brake pedal" on reopening the economy, amid rising fears that the UK is on the brink of a second wave. (Photo by Peter Summers/Getty Images)

    The UK economy only expanded by 2.1% in the month of August — less than a third of the growth seen in the previous month — in spite of the government’s “Eat Out to Help Out” initiative boosting consumer spending.

    The initiative, which saw the government cover 50% of a customer’s bill up to £10 ($12.9), fueled a rise in spending, with the food and beverage services industry growing 69.7% in August, according to data from the Office of National Statistics.

    But even with the boon to restaurants, pubs and cafes, economic growth for August fell short of expectations.

    While the UK economy did experience growth for the fourth consecutive month, its GDP is still 9.2% below the levels seen in February 2020, before lockdown restrictions began. 

    UK economic output shrank by 20.4% in the second quarter of 2020, the worst quarterly slump on record, pushing the country into the deepest recession of any major global economy.

    This crash in GDP in the April-June period, compared with the first quarter, is the worst since quarterlyrecords began in 1955. Industries most exposed to government lockdown measures to contain the coronavirus pandemic — services, production and construction — saw record drops.

    CNN

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