UK economic growth hit pre-pandemic levels in November


The UK’s economy sped up growth in November, before the Omicron variant struck, pushing above pre-pandemic levels for the first time.

The Office for National Statistics (ONS) that gross domestic product (GDP) had risen 0.9 per cent during the month, up from a just 0.1 per cent rise in October.

Analysts had predicted a 0.4 per cent rise in November, according to an average compiled by Pantheon Macroeconomics.

Services (0.7 per cent), production (1.0 per cent) and construction (3.5 per cent) output all increased between October and November 2021.

This means services and construction output are both 1.3 per cent above pre-coronavirus levels.

Consumer-facing services are still five per cent below pre-coronavirus levels, but output increased by 0.8 per cent over the time period.

This was mainly because of a 1.4 per cent increase in retail trade, while all other services rose by 0.6 per cent.

Office for National Statistics chief economist Grant Fitzner said: “The economy grew strongly in the month before Omicron struck, with architects, retailers, couriers and accountants having a bumper month. Construction also recovered from several weak months as many raw materials became easier to get hold of. This meant that monthly GDP exceeded its pre-pandemic level for the first time in November.”

If there are no other data revisions, quarterly GDP for the fourth quarter of 2021 will either reach or surpass its pre-coronavirus level, provided monthly December 2021 estimates do not fall by more than 0.2 per cent.

Jonathan Gillham, chief economist at PwC UK, argued that November’s data has surprised on the upside. He also pointed to recent easing of supply problems, which was crucial to the economy rebounding from the Covid-19 crisis.

However, he remained wary of the influence of the spread of the Omicron variant on future performance.

He said: “The rapid acceleration of the Omicron variant throughout December and January may well put the brakes on the recovery. The hospitality industry was hit hard (again) by the rise in Covid-19 cases and the introduction of Plan B measures. Rises in sickness absence will also hit underlying productivity measures. While we are not out of the woods yet, today’s data should give some optimism to the general public, businesses and policymakers that some of the fundamental barriers that were constraining economic growth are starting to ease off.”

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