UK’s Covid bounce back slows as economy grew just 0.1% in October

THE UK economy's bounce back slowed to 0.1% growth in October, leaving it still lagging 0.5% behind its pre-pandemic level.

The performance, revealed in the latest Office for National Statistics figures, was weaker than experts had expected.

In the previous month, the ONS reported gross domestic product growth of 0.6% and analysts had expected that GDP would rise by 0.4% in October.

The construction sector dragged down October's result as it recorded its largest drop in business since April 2020.

The industry was affected by a lack of raw materials and supply chain issues.

Meanwhile, services output grew by 0.4% in October 2021, reaching its pre-coronavirus pandemic level last recorded in February 2020.

This follows strong growth of 0.7% in September 2021.

ONS chief economist Grant Fitzner said: "While GDP growth slowed in October, the UK health sector again grew strongly while second-hand car sales and employment agencies also boosted the economy.

"Taken as a whole, the dominant services sector reached its pre-pandemic level for the first time in 20 months.

"These gains were offset by a drop in restaurants, which fell back after a strong summer, and reduced oil extraction and gas use.

"Construction also saw its biggest drop since April last year, with notable falls in housebuilding and infrastructure work, partly driven by shortages in raw materials."

It wasn't just the construction sector that was hit by supply chain issues during October.

Car retailers also reported delays as a result of the ongoing semi-conductor shortage.

That is now affecting other industries, for example, car rentals and leasing, which has seen drop in activity.

Other sectors that have been affected include the manufacture of machinery and equipment and the manufacture of rubber and plastic products.

In the three months to October, the economy grew 0.9%, reflecting the strong performance of the services sector in September.

This was due to the easing of Covid restrictions, including the reopening of accommodation, hospitality, entertainment and the arts compared to the previous three months.