UK economy returned to pre-pandemic levels in November | Economic growth (GDP)

Britain’s economy surpassed its pre-pandemic level for the first time in November after growing 0.9% in the month, partly on the back of an unexpected increase in early Christmas shopping.

The Office for National Statistics (ONS) said a jump in restaurant bookings and a rapid recovery in construction output were also behind the growth that took the size of the economy from 0, 7% above its pre-March 2020 level.

City economists had expected an expansion of just 0.4% and warned that November would likely prove a high point in 2021, with figures collected by the ONS coming shortly before the Omicron variant s is taking hold, exacerbating worker shortages as thousands were sick, and forcing the government to introduce Plan B restrictions. It followed growth of 0.2% in October.

The continued increase in healthcare services as a proportion of economic activity was another factor supporting the rise in GDP, the ONS said.

Amid rising inflation and the threat of an interest rate hike by the Bank of England, business groups warned the economy remained weak.

Suren Thiru, Head of Economics at the UK Chambers of Commerce, said: “Stronger growth in November is likely to be followed by a modest drop in output in December and January as consumers’ caution to socialize and spend , and increasing staff absences triggered by Omicron and Plan B restrict activity.

“While the UK economy is expected to rebound once Plan B measures are lifted, soaring inflation and continued supply chain disruption could mean that the UK’s economic growth outlook will remain under pressure for a while. much of 2022.”

Analysts said while the economy has struggled to grow since the summer, there is the prospect of a return to stronger growth in 2022, although consumer spending will be restrained by the rising cost of the life.

Ana Boata, head of economic research at credit insurer Euler Hermes, said the consumer had come to the rescue of an economy still suffering from the effects of Covid-19

“We expect GDP growth to reach 4.4% this year, followed by a further increase of 2.6% in 2023. However, not everything is simple. Wages will increase by around 3.5% compared to the pre-crisis average in 2022, in response to rising prices across the economy.

“Although the Bank of England has planned to raise rates at least twice this year to contain inflation, real household purchasing power will suffer, leaving excess savings to support household spending levels. consumers.”

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Chancellor Rishi Sunak welcomed the news that Britain’s economy was bigger than before the pandemic.

“It’s amazing to see the size of the economy return to pre-pandemic levels in November – a testament to the courage and determination of the British people,” he said.

“The government continues to support the economy, including through grants, loans and tax breaks for businesses, and our jobs plan is ensuring people across the country have fantastic opportunities.

“We all have a vital role to play in protecting lives and jobs, and I urge everyone to do theirs by getting boosted as soon as possible.”

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