London — Britain’s economy grew strongly in November and only exceeded its size shortly before the country entered the first COVID-19 blockade, official data showed on Friday.
The world’s fifth-largest economy expanded 0.9% in November much faster than expected. This is before the latest wave of COVID-19 infection and restrictions on many businesses, 0.7% higher than the National Bureau of Statistics in February 2020. (ONS) said.
Economists surveyed by Reuters predicted a monthly GDP growth rate of 0.4% in November.
“It’s amazing that the economy will return to pre-pandemic levels in November, a testament to the willingness and determination of the British people,” said Finance Minister Rishi Sunak.
Other economies have already recovered their pre-COVID scale, the main of which is the United States.
The UK economy shrank by more than 9% in 2020. This is one of the biggest pandemic downturns in the richest nations of the world.
Despite the accelerated growth in November, GDP was probably hit again in December when variants of the Omicron coronavirus swept Europe. The loss of momentum continued until January, with many companies reporting serious staff absenteeism and consumers still wary of going out.
Thursday’s data showed record levels of staff absenteeism due to COVID-19 at the turn of the year.
However, health officials believe that the wave of Omicron infections has peaked in the UK, analysts say the impact on the economy is likely to be short-lived, and the Bank of England (BoE) raises interest rates again this year. It states that it makes it possible to continue.
Aside from data revisions, quarterly GDP will remain at pre-coronavirus levels during the period October-December 2021 unless economic output in December falls by more than 0.2%, according to ONS. Will reach or exceed.
BoE’s current forecasts show that GDP will return to that size at the end of 2019 in the first quarter of 2022.
Early Christmas shoppers
According to ONS, retailers were doing well in November, with many consumers buying Christmas gifts earlier than usual, but architects, courier companies, and accountants were also at Bumper Month.
Construction has recovered from months of stagnation as raw materials have become easier to procure after problems in the global supply chain.
Even if the restrictions on the coronavirus known as “Plan B” are relaxed, the UK economy will still face challenges in the coming months.
Consumers are facing inflation, which is expected to reach a 30-year high of 6% or more in April, when energy prices jump an estimated 50%, and social security contributions begin to rise that month. increase.
“If Plan B’s measures are lifted, the UK economy should recover, but inflation surges and sustained supply chain disruptions will continue to put pressure on the UK’s economic growth outlook for much of 2022. May mean, “said.
After GDP data, Sterling rose against the US dollar and the euro.
Separately, ONS released trade data showing that the UK’s trade deficit narrowed slightly from £ 11.8 billion in October to £ 11.3 billion in November.
According to ONS, imports from countries other than the EU have been higher than imports from EU countries for 11 consecutive months, with the widest difference in the year.
Britain’s trade relations with the EU were hit by the introduction of new post-Brexit rules after Britain left the block single market in early 2021.