The UK’s GDP (Gross Domestic Product) grew by 7.5% in 2021, after a historic drop of 9.4% in the previous year, due to the pandemic, the British Office for National Statistics (ONS) said. , this Friday (11).
In the fourth quarter, GDP increased by 1.0%, despite the onset of the wave of the Covid-19 omicron variant. A similar increase had been recorded in the third quarter, but the figure was revised downwards, the ONS added.
In December, when the impact of the omicron was strongest and had a major impact on commerce, restaurants and the hotel sector, the British GDP was at 0.2%, remaining, however, at a level comparable to that of February 2020, before the start of confinement.
In the fourth quarter as a whole, however, the recovery in growth is not yet complete, compared to the last three months of 2019.
“The British economy experienced a mediocre year-end, due to the emergence of the omicron variant and government restrictions” to try to stem its meteoric advance, commented Rain Newton-Smith, chief economist at the CBI employers.
“While the worst is over, companies still have to deal with supply shortages and cost pressures, while households are bearing the brunt of rising prices,” he added.
pressure in homes
The Minister of Economy and Finance, Rishi Sunak, celebrated the “resilience” of the British economy, which grew at the “fastest pace among the G7 countries this year”. As a comparison, the GDP of the European Union grew 5.2% this year, and that of the United States, 5.7%.
The decline of the British economy in 2020 was, however, also the most important of the G7. The country was one of the hardest hit by the coronavirus crisis and went through months of strict confinement.
“The omicron variant hampered the recovery a bit,” said Yael Selfin, chief economist at KPMG in the UK, but, as a whole, “the British economy recorded its biggest growth in 2021 since the Second World War, recovering of the recession caused by the pandemic”.
She said she expects growth to “accelerate from this month onwards and that GDP growth in 2022 will reach 3.7%”. This percentage is close to the BoE (Bank of England) forecast of 3.75% for this year.
The economist says, however, that the coming months “may be disappointing”, given the 5.4% inflation rate, the highest in the country in 30 years, and the pressure on families, with the increase in prices and taxes. .
According to the Bank of England, inflation could accelerate to 7.25% in April, largely due to rising energy prices, before dropping back to 5% over the course of the year.
In the opinion of Paul Dales, from Capital Economics, “it is possible that the GDP fell in January, when the omicron forced a greater number of people to stop working to isolate themselves”.
Still, indicators suggest that activity started to recover from the middle of the month, adds Dales.
“In any case, a 2% drop in real household income this year, due to higher taxes and inflation, will limit growth from April onwards,” he added.
“Given the rise in inflation, however, that shouldn’t stop the BoE from raising its key rate from the current 0.50% to 1.25% this year, or even 2.00% next year,” concludes Dale. .
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
