UK GDP Growth Slows to 6Month Low as COVID Hits Hospitality

Britains economic recovery almost ground to a halt in October as a surge in coronavirus cases hammered the hospitality sector, adding to the chances that the economy will shrink over the final three months of 2020.

Thursdays official data showed the economy lost momentum as public authorities in much of the United Kingdom barred people from socialising in pubs and restaurants, ahead of a broader fourweek partial lockdown across England in November.

Gross domestic product rose 0.4 in October after expanding 1.1 in September, the Office for National Statistics said, the weakest growth since output collapsed in April during the first lockdown.

A limited rollout of a COVID vaccine began this week in Britain, offering hope for a rebound in consumer spending in 2021. But many businesses will face new headwinds from trade restrictions with the European Union that come into force on Jan. 1 when postBrexit transition arrangements end.

Prime Minister Boris Johnson and the EUs chief executive, Ursula von der Leyen, have given themselves until Sunday to seal a new trade pact that would limit some of the damage, after failing to overcome persistent rifts at a meeting on Wednesday.

The economy continued to grow in October, but at a snails pace. And with the COVID19 restrictions likely to remain in place for some time, the economy is in for a difficult few months yet, Ruth Gregory, economist at Capital Economics said.

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