Economy bounces back 15.5% after spring coronavirus lockdown

12 November 2020, 07:11 | Updated: 12 November 2020, 08:05

From July to September, the British economy bounced back by 15.5% after the first lockdown
From July to September, the British economy bounced back by 15.5% after the first lockdown. Picture: PA

By Kate Buck

Britain's economy expanded by 15.5% between July and September as it rebounded out of the recession caused by the spring coronavirus lockdown.

This marks the largest growth since records began in 1955 after Brits began spending again after the initial Covid-19 lockdown restrictions were eased.

But despite the good news, the Office for National Statistics has said GDP still remains below pre-Covid levels.

Jonathan Athow, deputy national statistician at the Office for National Statistics (ONS), said: "While all main sectors of the economy continued to recover, the rate of growth slowed again with the economy still remaining well below its pre-pandemic peak.

"The return of children to school boosted activity in the education sector.

Read more: Rishi Sunak contemplating raising middle-class taxes to pay for Covid debt

"Housebuilding also continued to recover while business strengthened for lawyers and accountants after a poor August.

"However, pubs and restaurants saw less business after the 'eat out to help out' scheme ended, and accommodation saw less business after a successful summer."

Up to the 7 August, the pandemic has so far cost the UK £210 billion, leaving the government wondering what it can do to pay back the vast amounts.

The Chancellor is considering increasing capital gains tax rates to bring them into line with income tax, after a report he commissioned suggested it could raise £14 billion for the Treasury

Whitehall has borrowed billions of pounds as a way of dealing with the ongoing coronavirus pandemic, from paying furloughed workers, bolstering the NHS and paying for the Eat Out To Help Out scheme.

But cutting exemptions and doubling rates - currently 10% for basic-rate taxpayers and 20% for higher-rate taxpayers - would not raise all of the £14 billion suggested by HMRC analysis quoted in the Office of Tax Simplification (OTS) report, as people would change their behaviour.

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Capital Gains Tax is a levy applied on the profits on the sale or disposal of shares and other property, and there is currently an annual allowance of £12,300.

But the OTS report found the current system can "distort behaviour", with figures showing around 50,000 people reported net gains close to the threshold in 2017-18.

More to follow...