Official estimates reveal that the UK economy grew by 7.5 percent last year, despite a drop in December owing to Omicron limitations.
It was the fastest growth rate since 1941, however it came after a 9.4% drop in 2020, when the epidemic pushed portions of the economy to shut.
The economy declined by 0.2 percent in December as a result of Omicron limitations in the hotel and retail sectors.
The economy has been “remarkably robust,” according to Chancellor Rishi Sunak.
According to numbers from the Office for National Statistics (ONS), growth in the last three months of 2021 was 1%, which ONS head of economic statistics Darren Morgan described as “quite strong” given Omicron’s spread and the imposition of some limitations.
The statistics were better than predicted, and Mr Morgan told reporters that the UK had the fastest-growing economy among the G7 nations in 2021. However, he cautioned against making broad parallels.
Mr Morgan explained, “The increase in 2021 comes from a low base in 2020, when the GDP collapsed dramatically.” “And if you compare where the UK economy is now to where it was pre-pandemic, the UK is in the middle of the pack among the G7.”
According to him, the US, Canadian, and French economies were all superior to the UK’s, while the UK was superior to Italy, Germany, and Japan.
Despite the drop in December, the ONS stated that GDP was in line with its pre-coronavirus level in February 2020 on a monthly basis.
In the final three months of 2019, however, GDP in the October-December quarter was 0.4 percent lower than pre-Covid levels.
“Today’s data demonstrate that the economy was extraordinarily resilient despite Omicron,” Mr Sunak told reporters. Last year, we were the fastest-growing economy in the G7, and we are expected to maintain that trend this year.
“However, I understand that people are concerned about rising prices, notably energy bills… which is why, last week, we unveiled a large package of support to assist millions of families in meeting their financial obligations.”
Last year’s rise was the greatest since the ONS began keeping statistics in 1948, and the quickest since 1941, when the Bank of England began collecting data during World War II.
The 9.4% decline in 2020 was the largest since 1919, when the country was demobilized following World War One.
In 2022, the economy is projected to experience challenges. The Bank of England hiked interest rates last week, lowered its economic growth prediction for this year from 5% to 3.75 percent, and warned that people would see the steepest drop in living standards since records began three decades ago.
According to Pat McFadden, Labour’s shadow chief secretary to the Treasury, the economy will “crawl” this year, with the worst growth of any G7 countries.
“The fact is that the way our government manages our economy is locking us in a cycle of high taxes and poor growth,” he added.
In April, inflation is expected to reach 7%, the same month that employees and businesses will begin to experience increases in their National Insurance (NI) contributions. Mr Sunak has under pressure to cancel the NI hike, but he has stated that it would go forward this month.
RSM UK economist Thomas Pugh said that output lost in December and January will be restored in February and March, “implying that Omicron should not have had a long-term impact on the economy.”
However, he predicted that consumer purchasing power would plummet in 2002.
Suren Thiru, the British Chamber of Commerce’s head of economics, claimed “crippling” inflation, April tax increases, and rising energy expenses indicate “the UK economy is facing a considerably poorer 2022.”