IoD: GDP grows but ‘hard part still to come’

Responding to latest official GDP figures, showing the economy grew by 6.6% in July, Tej Parikh, Chief Economist at the Institute of Directors, said:

“The economy continued its rebound in July, but the hard part is still to come.

“With the lockdown lifting, production has picked up quickly. Businesses have also been adapting at pace, launching new products and shifting their operations online.

“The recovery will start to hit speed bumps into the end of the year. Local lockdowns and new restrictions heap uncertainty on businesses, and demand remains limited in many areas. Increased costs from adjusting to the pandemic will only add to companies’ cashflow headaches, and the longer this continues, the harder it will be to maintain.

“Increased business support around local lockdowns was a welcome step, but the Government must be open to extending its flagship schemes. The challenge firms face will only be compounded by the prospect of Brexit-related disruption. The Chancellor should use the Autumn Budget to cut employment costs and encourage investment to provide the economy a much needed shot in the arm.”