The UK is reportedly on track for a record economic resurgence during the third quarter of the year, following sharp declines in GDP at the peak of the Covid-19 pandemic in Q2.
According to the Financial Times (FT), City of London economists have predicted a 14.3% rise in GDP for Q3, which could see the UK rise to the top G7 performance table during the quarter.
This is supported by new research from consultancy firm Fable Data, which shows a surge in spending during the first two weeks of August; a marked improvement on the same period last year, the FT reports.
As such, the UK experienced its first annual growth in spending since it went into lockdown at the tail end of March.
July retail sales also saw a return to growth, as volumes increased by 3.6% when compared with June, according to the ONS. The figure is also 3% above pre-pandemic levels in February 2020.
In the restaurant sector, the second week of the Eat Out to Help Out (EOTHO) initiative saw a 30% increase in sales compared with the week before the scheme started, according to research from Fourth.
The spike in consumer demand led to an increase in the hours worked by employees in the industry, as the total hours scheduled between Monday-Wednesday of the opening week jumped 17% from the previous week – with pubs accounting for a 13% increase, restaurants 33%, and QSR 15%.
Further to this, it was announced that scores from the Barclaycard Payments’ SME Barometer jumped from 79 out of a possible 200 points at the start of Q2, to 95 points at the start of Q3.
It revealed that over a third (36%) of SMEs share a positive outlook for their own business during the third-quarter period, up 15% versus Q2. Across all sectors, SMEs predict a 5% increase in revenue for Q3 compared to Q2, which grows to 14% over the next 12 months.
Businesses reported, on average, a 14% decline in revenue for their second quarter, compared with the first quarter. The drop was half as severe as the predicted 28% decline.
Luke Davis, CEO and founder of SME investment firm IW Capital, said: “The latest feedback from the SME Barometer is very much what we have been seeing when interacting with small and medium-sized businesses in the post-COVID economy. This, of course, is a time of uncertainty but small enterprises are nimble and adaptive to their environment, so it is no surprise to see that their optimism is growing.”