UK economy expanded 7.5% last year
The UK economy rebounded in 2021 as gross domestic product (GDP) grew by 7.5% following the easing of pandemic restrictions, according to official figures.
The growth, which exceeded projections by the Bank of England, nevertheless came after a 9.4% slump in the economy in 2020.
New data from the Office for National Statistics (ONS) also showed that the economy grew by 1% in the final three months of the year, despite the impact of the spread of the Omicron variant of Covid-19.
The economy contracted by 0.2% in December as the hospitality and leisure sector felt the brunt of Omicron and related Government restrictions.
However, the economy remained at pre-pandemic levels from February 2020.
The retail and hospitality sectors were the biggest casualties in December with many impacted by the restrictions that were introduced to combat the spread of Omicron.
ONS director of economic statistics Darren Morgan said: “GDP fell back slightly in December as the Omicron wave hit, with retail and hospitality seeing the biggest impacts.
“However, these were partially offset by increases in the Test and Trace service and vaccination programmes.
“Despite December’s setback, GDP grew robustly across the fourth quarter as a whole, with the NHS, couriers and employment agencies all helping to support the economy.
“Overall, GDP in December was in line with its level in February 2020, before Covid-19 struck, while in the fourth quarter as a whole, it was slightly below that of quarter four in 2019.”
Mr Morgan added that although GDP in December was in line with levels from February 2020, the fourth quarter as a whole was “slightly below” the same period in 2019, before the pandemic struck.
Chancellor of the Exchequer Rishi Sunak said: “Thanks to our £400 billion package of support and making the right calls at the right time, the economy has been remarkably resilient; with the UK seeing the fastest growth in the G7 last year and GDP remaining at pre-pandemic levels in December.
“I’m proud of the resolve the whole country has demonstrated, and proud of our incredible vaccine programme which has allowed the economy to stay open.
“We’re continuing to help the economy rebuild through our Plan for Jobs, boost for business investment and support for households with the cost of living.”