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GDP grew by 0.4% in October, the sixth consecutive monthly increase, although growth has slowed in recent months, according to the latest figures from the ONS. Its data shows that the rate of recovery has slowed each month since the largest rise of 9.1% in June 2020.
The housing market has bounced back however, difficult economic conditions and job insecurity mean purchasing a house is still no mean feat. Which is why it’s surprising that some consumers haven’t learnt the value of protecting their home with the right insurance.
A reported a significant drop in completions, with only 22% of purchases completing in July, August, and September. This compares starkly to the first quarter of the year when 60% of applied mortgages completed. Remortgages exhibited a stronger completion rate of 64% from July to September. However, this was still 15% down on the figures from January to March. Nevertheless, the amount of new mortgage application submitted has risen consistently through to October and, since coming out of the first lockdown in June, is now back to pre-lockdown levels.
The OBR's latest economic forecast shows that the UK economy will contract by 11.3% in 2020. Outlined in the government's Spending Review, Chancellor Rishi Sunak said the fall was the largest for more than 300 years. The OBR predicts that the economy will recover by 5.5% in 2021, 6.6% in 2022, then 2.3%, 1.7% and 1.8% in the following years. It says output won't return to pre-crisis levels until Q4 2022, describing the economic damage as "lasting", with "long-term scarring". By 2025, the economy is predicted to remain 3% smaller than expected. Sunak outlined a "significant but necessary increase in borrowing and debt", with the UK forecast to borrow a total of £394bn this year, equivalent to 19% of GDP - the largest in peacetime history. Sunak said borrowing is expected to fall to £164bn next year but will remain at £100bn or more until the end of Parliament. He added that underlying debt is forecast to rise in every year, rising from 91.9% of GDP this year, reaching 97.5% of GDP in 2025-26. However, they stressed that the "cost of inaction would have been far higher”.
The Office for National Statistics (ONS) stated October’s borrowing reached £22.3bn - £10.8bn more than over the same time period last year. While borrowing in October was lower than economic forecasts and £12.1bn less than during the previous month, it still marks the highest October borrowing since records began and 6th highest monthly total overall.
