LAST UPDATE 12.24
The British economy grew by 7.5% in 2021, official data revealed on Friday, recovering from its historic dive of 9.4% in 2020, when pandemic restrictions stifled all activity.
On a quarterly basis, the UK’s GDP is estimated to have grown by 1% in the last three months of the year, the National Statistical Office (ONS) announced on Friday.
In December, GDP shrank 0.2% as the Covid-19 Omicron variant pushed for new caution and restraint, although economists polled by Reuters expected a more serious 0.6% contraction.
The largest contributors to the quarterly increase in output came from “human health and social work activities at the beginning of the quarter”, according to the ONS, along with the “large increase in coronavirus tests (Covid-19)” and activities to detect and vaccination program. ”
The ONS reported that economic output in the fourth quarter remained 0.4% below pre-pandemic levels (fourth quarter of 2019).
Although the Omicron variant did not present significant obstacles, the UK economy faces a number of challenges in 2022.
The Bank of England now expects inflation to peak at 7.2% in April and has imposed successive interest rate hikes for the first time since 2004, raising the key bank rate from 0.1% to 0.5%, with an expected higher tightening.
Meanwhile, the country’s energy regulator has raised its price ceiling by 3 693 ($ 938) a year since April 1, amid rising energy prices, putting further pressure on millions of households.
The Bank of England also cut its GDP growth forecast last week, warning that the impact of inflation means the economy is likely to grow by 3.75% in 2022 instead of the 5% previously forecast.
Source: Capital
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