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GDP Q3 2021 Preliminary Estimate

UK GDP rose by 1.3% in Q3 2021 and is now 2.1% below its pre-pandemic level

Source: ONS


  • UK GDP is estimated to have increased by 1.3% in Q3 2021 (July-Sept). This represents a marked slowdown on the 5.5% increase seen in Q2. 
  • The level of economic activity in the UK remains 2.1% below where it was prior to the pandemic at the end of 2019. 
  • On a monthly basis, GDP fell in July (-0.2%), before picking up again in August (+0.2%) and September (+0.6%).
  • Hospitality, arts and recreation and health were the key growth drivers over the quarter following the further easing of restrictions and reopening of the economy.

GDP breakdown by sector


  • The services sector remains the main contributor to the economic recovery, expanding by 1.6% in Q3, following on from strong 6.5% growth in Q2. 
  • Services output has almost fully recovered and is now only 0.7% below Q4 2019’s pre-crisis level (or 0.3% below Feb 2020). 
  • Accommodation and food services surged by 30.0% in Q3, while arts, entertainment and recreation services rose by 19.6%, reflecting the relaxation of almost all Covid-19 restrictions in July, including the re-opening of indoor hospitality. 
  • However, wholesale and retail output fell by 2.5% in Q3, as the initial retail boom phased out and consumers prioritised spending in other areas such as hospitality. Retail sales fell month-on-month in July (-2.9%), August (-0.6%) and September (-0.2%). 
  • The hospitality industry is now further above its pre-crisis level of February 2020 than retail, indicating a rapid rebalancing in consumer spending away from goods towards newly reopened services, a reflection of staycations and strong pent-up demand for socialising. 
  • In September, supply chain disruption and fuel shortages also dragged on wholesale and retail trade (-1.5%), with the new car market recording its weakest September sales since 1998.


  • Production output rose by 0.8% in Q3 and is now 2.1% below its pre-pandemic levels. 
  • The largest contribution to the quarterly increase was from mining and quarrying, with output rising by 26.3% following three consecutive quarters of contraction. The increase can be attributed to the reopening of sites that had previously been temporarily closed for planned maintenance. 
  • Manufacturing output fell by 0.3% in Q3, driven by a sharp decline in the production of motor vehicles (-8.2%) caused partly by a global microchip shortage.


  • The Construction sector fell by 1.5% in Q3, after four consecutive quarters of growth.
  • All sub-sectors of construction declined, reflecting challenges faced by the construction industry from rising cost of raw materials and delays to the availability of products. 
  • Construction output had recently recovered to be 0.9% above its pre-pandemic level in April 2021, but in September 2021 is now 1.0% below its pre-crisis level.

Household consumption 

  • In Q3, household consumption increased by 2.0%, reflecting the continued easing of COVID-19 restrictions.
  • In comparison with levels before the pandemic, household consumption is now 4.4% lower than in Q4 2019. 
  • The largest contributions were from spending on restaurants and hotels (+30.9%) and transport (+4.5%), which was partly offset by household goods and services (-9.6%), and clothing and footwear (-7.7%).

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