Britain’s economic growth slowed to 1.3% in the third quarter, official figures show.
It meant that gross domestic product (GDP) remained 2.1% lower than pre-pandemic levels, according to the Office for National Statistics (ONS).
The economy’s July-September performance was slightly weaker than the figure of 1.5% expected by economists and marks a sharp slowdown compared to second quarter growth of 5.5%.
However on a monthly basis for September, growth of 0.6% was a bit better than expected and suggested that when comparing with February 2020, the economy was only 0.6% smaller.
The services sector, representing about four-fifths of output, was boosted by further growth for hotels and restaurants – up 30% – while arts and entertainment grew by 19.6%, as restrictions eased and the economy reopened.
But it was held back by weaker consumer spending with successive declines in retail sales.
Meanwhile the manufacturing sector – where car factories have been held back by a global shortage of semiconductor chips – and construction both contracted over the period.
Chancellor Rishi Sunak said: “The economy continues to recover from COVID and thanks to schemes like furlough, the unemployment rate has fallen for eight months in a row and we’re forecast to have the fastest growth in the G7 this year.
“As the world reopens we know that there are still challenges to overcome.”
But Bridget Phillipson, Labour’s shadow chief secretary to the Treasury, said: “This morning’s GDP figures confirm that the economic recovery is slowing and risks grinding to a halt.
“We need urgent action to keep the economy moving and support households as we head into the winter, as prices rise and as the cost of living crisis continues to escalate.”