UK economy rebound stronger than thought but trouble lies ahead

The UK economy grew at a faster pace than first thought in the closing three months of 2021 despite the impact of Omicron, according to revised official figures.

The Office for National Statistics (ONS) said economic growth accelerated to 1.3 per cent in the fourth quarter of the year, compared with the initial estimate of 1 per cent. It marked a bounce-back on downwardly revised growth of 0.9 per cent in the third quarter of last year.

The ONS said gross domestic product (GDP) was 0.1 per cent below where it was before the pandemic and within touching distance of its pre-Covid peak in the fourth quarter.

But revisions to GDP figures for the past two years means the economy grew by 7.4 per cent in 2021 - still a record rebound but lower than the 7.5 per cent initial estimate.

The ONS revised the record-breaking GDP drop at the height of the pandemic in 2020 to 9.3 per cent, against the 9.4 per cent first estimate.

The ONS said this comes after it revised the record-breaking GDP drop at the height of the pandemic in 2020 to 9.3 per cent, against the 9.4 per cent first estimate.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The latest reading on quarterly UK GDP is a bit like assessing the fitness before being sideswiped by a severe cold.

“Although growth was marginally upgraded for the October to December period to 1.3 per cent, it came before the full impact of Omicron hit and well before commodity chaos was unleashed by the invasion of Ukraine.

“There is a worrying trend in terms of household finances.”

A message from the Editor:

Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions