The UK economy grew by 4.8% between April and June, but business investment remains short of pre-pandemic levels which could limit productivity and competitiveness.
According to figures from the Office for National Statistics, the increase in GDP was boosted by retail, restaurants and hotels reopening but was still below the 5% expected by the Bank of England.
The UK economy is now 4.4% smaller than it was before the pandemic.
Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said: “The latest data confirms a robust rebound in output in the second quarter as the UK economy unlocked and restrictions eased.
“The increase in output in the second quarter largely reflected a striking rise in household spending as the easing of restrictions helped consumers spend some of their ‘unanticipated’ savings accumulated during lockdowns, boosting output from consumer facing services firms.
“Business investment remains well short of pre-pandemic levels following an underwhelming revival in the second quarter and means that it may be a weak point of the recovery, limiting UK productivity and competitiveness.
“Strong growth in the second quarter may be the high point for the UK economy with economic activity likely to moderate in the third quarter as staff shortages, supply chain disruption and consumer caution to spend limits any gains from the lifting of restrictions in July.
“Against this backdrop, policymakers must guard against complacency over the underlying strength of the recovery. A comprehensive rebuild strategy to turbocharge growth post Covid is needed, alongside a clear plan for dealing with any future virus response, to give firms the confidence to start firing on all cylinders again.”
The full ONS figures can be found here