LONDON: Britain’s economy rebounded in August after the lifting of coronavirus restrictions, but unexpectedly shrank the previous month, official data showed on Wednesday.

The gross domestic product grew 0.4 per cent in August, the first full month since the lifting of the Covid curbs, the Office for National Statistics (ONS) said in a statement.

“Accommodation and food service activities, and arts, entertainment and recreation contributed most positively to services growth in August 2021, partially offset by falls in health output and retail trade,” the ONS added.

The UK economy remains 0.8 per cent smaller than its pre-coronavirus level. All lockdown restrictions in England were lifted on July 19, allowing people to visit shops and hospitality venues without having to wear masks.

“The economy picked up in August as bars, restaurants and festivals benefited from the first full month without the Covid-19 restrictions in England,” ONS economics statistics director Darren Morgan noted.

“This was offset by falls in health activity with fewer people visiting GPs and less testing and tracing.”

The ONS also revealed that the economy shrank 0.1 per cent in July, revising down an initial estimate of 0.1 per cent growth.

“Later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July,” Morgan said.

July was downgraded, owing to downwardly revised data for the automobile and energy sectors, and improvements to how health output is measured.

The outlook remains clouded by recent shortages of labour, semiconductors and motor fuel, surging oil and gas prices, and ongoing fallout from both Brexit and Covid.

“The recent broadening in shortages and the fuel crisis may mean that growth has come to a near standstill since August,” warned economist Paul Dales, chief UK economist at research consultancy Capital Economics.