Despite posting the highest quarterly gross domestic product growth since 1955, the economy of the United Kingdom still remains almost 10% below pre-pandemic levels in 2019.
There was also a palpable slowdown in growth during the third quarter and the possibility of a double-dip recession in the fourth.
The British economy grew by a record 15.5% in the third quarter, reported the Office of National Statistics (ONS) Thursday. The third quarter rise was the largest gross domestic product jump ever recorded by the ONS since 1955.
The historic rise stems from the easing of COVID-19 lockdown measures during the third quarter following a historic plunge in the second quarter gross domestic product.
The UK's gross domestic product plunged by 20.4% during the second quarter due to strict lockdowns, the biggest decline in any major advanced economy this year.
The lockdowns led to economic activity collapsing across the UK. They also pushed the UK officially into an economic recession in August, its first in 11 years.
Gross domestic product is not expected to exceed the level it reached in 2019 until the first quarter of 2022.
The ONS said its initial estimate of gross domestic product growth in the third quarter of 2020 was 15.5%. Economists had expected third quarter gross domestic product to grow by 15.8%.
ONS, however, said the strong third quarter rally still means gross domestic product is still 9.7% below where it was at the end of 2019. Compared with the third quarter of 2019, 2020 gross domestic product fell 9.6%.
ONS also said monthly growth slowed in the entire third quarter. Gross domestic product grew by 6.3% in July; decelerated to 2.2% in August and 1.1% in September.
Prospects for the wounded British economy in Q4 appear uninviting given the new monthlong partial lockdown until Dec. 2 due to the huge new surge in COVID-19 cases in the second wave of infections.
As a consequence, any economic recovery is expected to falter in the fourth quarter.
"Although less restrictive than the first, a second lockdown means that output is likely to contract in the fourth quarter," argues Suren Thiru, Head of Economics at the British Chambers of Commerce.
"With much of the economy now in a weaker position to withstand periods of extended closure than at the start of the pandemic, the damage to economic activity in the near term may be significant, particularly if restrictions extend beyond Dec. 2."
The Bank of England expects the economy to shrink by 2% in the fourth quarter and by 11% for the full-year 2020.
"The UK economy seems on course for a double-dip recession this winter and a far more challenging path to recovery in 2021," said IHS Markit economist Tim Moore.
