The British economy grew 6.6 percent in July from the previous month, according to an initial estimate from the Office for National Statistics, as the country continued to open up after the lockdown.
Although slower than June’s 8.7 percent growth rate, the recovery was spread across even more sectors of the economy as education resumed, pubs and hairdressers reopened, and car sales surged.
After three consecutive months of growth, Britain’s gross domestic product was 11.7 percent lower in July than it was before the pandemic in February. “While it has continued steadily on the path towards recovery, the U.K. economy still has to make up nearly half of the G.D.P. lost since the start of the pandemic,” Darren Morgan, the agency’s director of economic statistics, said.
Earlier this week, Andy Haldane, the chief economist at the Bank of England, said the speed and scale of the recovery had not been given enough credit and that the economic data justified his optimism. But other central bankers have struck a more cautious note, concerned that the window of fast economic recovery is already closing.
In Britain, coronavirus infections are increasing and new restrictions on social gatherings have been announced as fiscal support for businesses and residents is winding down. This suggests the country is moving into a second stage of recovery in which it will be harder to make up the rest of the lost economic output from the national lockdown. A group of lawmakers on Friday urged the government to extend the furlough program, which helps pay employees’ wages, for some sectors of the economy beyond its current October end date.
“The rise in Covid cases and return of public health restrictions means we are coming towards the end of the easy economic wins from restarting activity,” James Smith, research director at the Resolution Foundation, said. “With emergency support to firms and workers being withdrawn, far tougher times lie ahead this autumn.”
U.S. stock futures pointed to a rise of nearly 1 percent when trading begins on Friday, after another down day on Wall Street where technology stocks weighed on the market.
Global equities were slumping on Friday. Britain’s FTSE 100 was leading European indexes, up 0.3 percent, while Germany’s DAX was flat. In Asia, Hong Kong’s Hang Seng Index rose 0.8 percent, while the Kospi in South Korea ended the day unchanged.
Oil futures were slightly lower, the yield on the 10-year Treasury note was slightly higher, and gold was trading at $1,943 an ounce, down 0.1 percent.
The euro continued rising against the dollar, up 0.4 percent to $1.186. On Thursday Christine Lagarde, the chief of the European Central Bank, said policymakers would “monitor carefully” the euro exchange rate, but her comments were not enough to stem the currency’s rise, which is up about 10 percent since March.
A rising euro hurts European exporters, whose goods become more expensive when purchased in other currencies. It also dampens inflation in the eurozone; too-low inflation can put the brakes on economies.
On Thursday, stocks on Wall Street were sharply lower, the fourth retreat in five trading sessions for the S&P 500, which closed down 1.75 percent for the day, while the Nasdaq composite slid 2 percent. Apple, Amazon, Microsoft and Google’s parent Alphabet were all lower, after giving up early gains.
The top executives of Rio Tinto, one of the world’s largest mining companies, said they would step down after a shareholder revolt over the company’s willful destruction of prehistoric rock shelters, sacred to two Australian Indigenous groups. Shares trading in Australia dropped 0.6 percent.
China is still most likely months away from mass producing a vaccine that is safe for public use. But the country is using the prospect of the drug’s discovery in a charm offensive aimed at repairing damaged ties and bringing friends closer in regions China deems vital to its interests.
Latin American and Caribbean nations will receive loans to buy the medicine, and Bangladesh will get over 100,000 free doses from a Chinese company.
In the Philippines, where China is competing with the United States for influence, President Rodrigo Duterte told lawmakers in July that he had “made a plea” to China’s leader, Xi Jinping for help with vaccines. He also said he would not confront China over its claims to the South China Sea.
A day later, Wang Wenbin, a spokesman for China’s Foreign Ministry, said China was willing to give the Philippines priority access to a vaccine.
China’s vaccine pledges, on top of earlier shipments of masks and ventilators around the world, help it project itself as a responsible player as the United States retreats from global leadership. Beijing’s moves could also help it push back against accusations that the ruling Communist Party should be held responsible for its initial missteps when the coronavirus first emerged in China in December.
The ability to develop and deliver vaccines to poorer countries would also be a powerful signal of China’s rise as a scientific leader in a new post-pandemic global order.
“People are very willing to take a Chinese vaccine,” said Ghazala Parveen, a senior official at the National Institute of Health in Pakistan, where two Chinese vaccine makers are conducting trials. “In fact, we are being asked by people to have the vaccine ready as soon as possible.”
As the global economy absorbs the most punishing reversal of fortunes since the Great Depression, hunger is on the rise.
Those confronting potentially life-threatening levels of so-called food insecurity in the developing world are expected to nearly double this year to 265 million, according to the United Nations World Food Program.
Worldwide, the number of children younger than 5 caught in a state of so-called wasting — their weight so far below normal that they face an elevated risk of death, along with long-term health and developmental problems — is likely to grow by nearly seven million this year, or 14 percent, according to a recent paper published in The Lancet, a medical journal.
The largest numbers of vulnerable communities are concentrated in South Asia and Africa, especially in countries that are already confronting trouble, from military conflict and extreme poverty to climate-related afflictions like drought, flooding and soil erosion.
The unfolding tragedy falls short of a famine, which is typically set off by a combination of war and environmental disaster. Food remains widely available in most of the world, though prices have climbed in many countries.
Rather, with the world economy expected to contract nearly 5 percent this year, households are cutting back sharply on spending. Among those who went into the pandemic in extreme poverty, hundreds of millions of people are suffering an intensifying crisis over how to secure their basic dietary needs.
The pandemic has reinforced basic economic inequalities, none more defining than access to food.
“I’m increasingly concerned about the socioeconomic impacts of the pandemic on the nutrition situation of children,” said Victor Aguayo, chief of nutrition programs at UNICEF in New York. “It’s a perfect storm to see an increase in malnutrition rates if appropriate measures and programs are not put in place.”
The fitness company Peloton, which sells expensive exercise bicycles and treadmills, said Thursday that it had $607 million in revenue in the three months ended June 30, a 172 percent increase from the same time last year, outpacing industry expectations. The company made $89 million in profit, compared with a loss of $47 million at the same time in 2019.
Century 21, the famous New York discount store chain, said Thursday that it had been forced to file for bankruptcy and would close all 13 of its locations after its insurance providers refused to pay about $175 million to the business. Raymond Gindi, a co-chief executive and a son of a founder, said that unlike the period after the Sept. 11 attacks, “our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today, have turned their backs on us at this most critical time.”
JPMorgan Chase’s heads of markets and sales asked their top managers to return to offices in Midtown Manhattan and London starting Sept. 21, according to two employees familiar with the matter. The request applies to perhaps 600 senior managers, according to one of the people, who was not authorized to speak publicly. But it’s not clear how many will actually come back right away: The bank said it would make exceptions for employees who faced health problems or child-care hurdles.