Economic Review – October 2020

The latest gross domestic product (GDP) statistics show that, while the UK recovery did continue in August, the pace of growth has slowed and output still remains significantly below pre-coronavirus levels.

Although official data shows the summer recovery in retail sales continued into September, more recent survey evidence suggests this growth may have ground to a halt and following the announcement of a second lockdown, the retail sector now faces another major setback.

At the end of October, global stocks came under pressure, as concern over the economic impact of rising coronavirus infections weighed heavily on markets. In the last week of the month, global virus cases increased by over 500,000, Germany and France entered national lockdowns, Boris Johnson announced a four-week lockdown in England commencing on 5 November (subject to a Commons vote), and a record surge of cases in the US pushed hospitals to capacity ahead of the presidential election.

The unemployment rate now stands at a three-year high, with fears that a second national lockdown in England and tighter restrictions in other nations, designed to combat a second coronavirus wave, will inevitably lead to further job losses.

Last month again witnessed a series of ups and downs as the Brexit rollercoaster rumbled on; but talks have resumed and intensified as negotiators attempt to bridge the gaps and secure a last-minute deal.