UK GDP grew by 15.5% over the third quarter of this year, according to the latest data from the Office for National Statistics (ONS). While it is the largest recorded quarterly growth in history, the figures failed to hit the 15.8% forecast growth from economists.
The latest GDP figures are a stark contrast to the readings from Q2, which found the UK's GDP fell by 19.8% due to stringent measures implemented during the first lockdown.
That said, the UK economy remains 10% below pre-pandemic levels, while during September of this year the UK economy expanded by 1.1%, which fell below expectations of 1.5%. August, which saw 2.5% growth, also failed to meet expectations.
With lockdown restrictions back in place, Q4 is likely to weaken further. However, thanks to the recent positive Pfizer vaccine news, we can potentially start looking forward to GDP growth in 2021 with more confidence."
Jon Hudson, manager of the Premier UK Growth fund at Premier Miton, said: "Growth in the quarter started brightly, boosted by the easing of lockdown restrictions and the Eat Out to Help Out scheme in August, but it waned in September.
"With lockdown restrictions back in place, Q4 is likely to weaken further. However, thanks to the recent positive Pfizer vaccine news, we can potentially start looking forward to GDP growth in 2021 with more confidence."
Laith Khalaf, financial analyst at AJ Bell, warned the swollen summer of economic activity "hasn't repaired the damage done to the first half of the year" and that the new lockdown means the UK can expect to end 2020 "significantly behind where it started".
He said: "The real litmus test for the economy going forward is how soon it can return to pre-pandemic levels. News of a potential vaccine makes the climb back look a lot less daunting, not only because it offers the prospect of a brighter future, but also because it gives businesses and individuals greater confidence in the here and now.
"Businesses can see a glimmer of light at the end of the tunnel, rather than an interminable struggle to stay afloat until we return to some semblance of the old normal at some unknown point in the future."
This article was first published by our sister title Professional Adviser