London (AFP)

The British economy recovered in the second quarter, rebounding 4.8% of GDP thanks to the lifting of health restrictions, but risks persist, notably with the surge of the Delta variant.

The gross domestic product (GDP) climbs again with the reopening of the economy having fallen by 1.6% in the first quarter, announced Thursday the National Bureau of Statistics (ONS).

However, it has not yet regained its pre-pandemic level, since it is 4.4% lower than it was at the end of 2019.

During the second quarter, activity benefited from the gradual lifting of health restrictions, in particular the reopening of pubs and restaurants.

GDP was supported above all by household spending (+ 7.3%) while investment fell slightly (-0.5%).

Growth even accelerated slightly for the month of June alone to 1%, better than in May (+ 0.6%) but less than in April (+ 2.2%), the first month following the containment of the beginning of the year.

In June, "the British economy continued to rebound strongly, with the hotel and catering sector benefiting from the first full month during which it was possible to eat indoors", notes Jonathan Athow, ONS statistician .

The government immediately welcomed this resumption.

UK Finance Minister Rishi Sunak after a speech in London on July 1, 2021 Stefan Rousseau POOL / AFP / Archives

- "Challenges to overcome" -

"Our economy is on the mend and shows strong signs of recovery, thanks to our employment plan and the success of our vaccination program," said Finance Minister Rishi Sunak.

He said that in the second quarter the UK enjoyed the fastest growth rate of the G7 countries, but warns that "there are still challenges to overcome".

For Steve Clayton, fund manager at Hargreaves Lansdown, "the strong support from the reopening is behind us and the pace of growth will slow down for the remainder of the year."

The growth figures do not yet fully integrate the impact of the spread of the Delta variant of Covid-19, which has led to an increase in the number of contaminations, and staff shortages, forcing hundreds of thousands of cases to contact British to isolate themselves.

Companies are also facing rising costs due to sourcing difficulties, with the restarting of many economies around the world creating bottlenecks.

"The recovery remains fragile," said Yael Selfin, economist for KPMG in the United Kingdom.

"There are signs that supply issues and staff shortages are slowing the pace of the recovery, even before the economy has returned to pre-Covid levels," she said.

These headwinds could last for months and lead to further inflation, especially if household demand remains strong.

The Bank of England (BoE), which sees inflation climb to 4%, warned last week of the negative short-term effects of the Delta variant.

A woman wearing a mask walks past shops and restaurants in London, July 27, 2021 Tolga Akmen AFP / Archives

The monetary institution, however, maintained its growth forecast at 7.25% for 2021, expecting the economy to return to its pre-pandemic level at the end of the year.

The start of the school year could not be easy for the British economy, with the planned withdrawal in September of the partial unemployment scheme put in place by the government since the start of the health crisis.

The risk is to see an increase in the unemployment rate, which could be dampened, however, by the large number of vacancies in the United Kingdom due to the resumption of activity.

The UK is one of the developed countries hardest hit by the pandemic, with GDP falling nearly 10% last year, the worst in 300 years, and a death toll of more than 130,000.

© 2021 AFP