The economy rebounded again in August with a GDP growth of 0.4%, mainly due to a strong boost given to the tourism and leisure sector. August was the first full month without any Covid restrictions.
However, key sectors of the economy are still struggling, including retail, construction (which has fallen for three of the past four months) and many sectors are hit hard by supply chain issues. High gas prices are also hurting the economy, and there are still issues related to self-isolation that particularly affect those parts of the economy that sell goods overseas. If the effects of inflation are removed, the trade deficit has worsened by £ 1.6 billion in the past 3 months.
Acute labor shortages are reported in occupations such as: welders, event workers, industrial workers, automotive workers, engineers, upholsterers, builders, social workers, laborers plant, cleaners, accountants, chefs and security personnel. But also, many people are still looking for a job – the skilled workers available do not match the skills required for the vacancies that companies offer.
Coupled with the specter of permanent rather than temporary inflation, there are growing risks that could jeopardize the pace at which the UK economy can recover from the Covid crisis.