UK GDP growth sees return back above pre-pandemic level

The UK’s GDP is estimated to have grown back above above its pre-pandemic level for the first time, according to the Office for National Statistics (ONS).

New figures revealed that GDP grew by 0.9% in November 2021 and now sits 0.7% higher than its level in February 2020.

Services (0.7%), production (1.0%) and construction (3.5%) output all increased between October and November, meaning that services and construction output are both 1.3% above their pre-coronavirus levels. The ONS confirmed that production remains 2.6% below.

If there are no other data revisions, the ONS added that its quarterly GDP figure for Q4 2021 will either reach or surpass its pre-pandemic level – from Q4 2019 – provided the monthly December 2021 estimate does not fall by more than 0.2%.

“It’s taken 20 volatile months for the UK economy to finally clamber back up to where it had been before COVID wrought its damage,” commented AJ Bell financial analyst, Danni Hewson.

“The speed of growth has caught many by surprise considering the lacklustre figures delivered the previous month, although October’s number have been revised upwards to 0.2%.

“Consumers did spend early and lavishly and trading updates from many retailers suggest that spend did continue through December, but it begs the question of how much disposable income will be left to help the economy power into the new year particularly as those price increases in energy really begin to bite.”

Hargreaves Lansdown senior investment and markets analyst, Susannah Streeter, added: “With Omicron expected to be a short sharp shock rather than a lingering malaise, this November snapshot is likely to be taken as more evidence that once infection rates subside the economy will be in good enough shape to withstand further interest rate rises, to keep a lid on soaring inflation.

“However, there are also indications that supply chain snarl ups may have eased, with car output rising and construction materials reportedly easier to source, which could help limit the rise in prices to some extent.’’

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