According to the report from the Office for National Statistics, UK gross domestic product (GDP) is estimated to have increased by 1.3% in Quarter 3 (Jul to Sept) 2021. Economists had expected a 1.5% increase. This follows the 5.5% increase in the previous quarter, where there was an easing in many of the coronavirus (COVID-19) restrictions.
In output terms, the largest contributors to this increase were from hospitality, arts and recreation and health following the further easing of restrictions and reopening of the economy.
The level of quarterly GDP is now 2.1% below where it was before the coronavirus pandemic at Quarter 4 (Oct to Dec) 2019.
In Quarter 3 2021, household consumption made the largest contribution to expenditure; there was a fall in underlying inventories, likely reflecting some of the recent supply chain challenges, and a negative contribution from net trade.
Monthly estimates show GDP improved across the three months in Quarter 3. Revised estimates show that GDP fell in July by 0.2% and saw a modest pickup in August (0.2%). There was more of a rebound in September (0.6%), driven by services output growth (0.7%), as human health activities increased strongly.
Nominal GDP rose by 1.4% in Quarter 3 2021 and is now 3.2% above its Quarter 4 (Oct to Dec) 2019 levels. The implied GDP deflator represents the broadest measure of inflation in the domestic economy, reflecting changes in the price of all goods and services that comprise GDP. The implied deflator increased by 0.2% in the third quarter of 2021, driven by a rise in the household (0.8%) implied deflator, partially offset by a fall in the government implied deflator (-0.7%). Compared with the same quarter a year ago, the implied GDP deflator rose by 0.5%. Similarly, this reflected an increase in the household implied deflator (2.4%) partially offset by a fall in the government implied deflator (-10.7%).