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

The UK financial system surpassed its pre-pandemic stage for the primary time in November forward of the fast unfold of the Omicron variant and authorities’s warnings about office and social gatherings.

Official figures confirmed GDP grew by 0.9% within the penultimate month of 2021, making the UK financial system 0.7% bigger than it was earlier than March 2020 and the primary lockdown.

The US, France, Denmark and Sweden are among the many different wealthy international locations to have recovered all of the misplaced floor through the pandemic whereas Germany, Italy and Spain have but to go the pandemic milestone.

Metropolis economists had anticipated an enlargement of solely 0.4% and stated November was more likely to show a excessive level in 2021, with the figures collected by the Office for National Statistics coming shortly earlier than the Omicron variant took maintain, exacerbating employee shortages as hundreds have been off sick. It adopted progress of 0.2% in October.

The UK economy grew by 0.9% in November, taking it above pre-pandemic levels for the first time

A surge in early Christmas purchasing offered one of many largest boosts to exercise in November, although all sectors, together with manufacturing and providers, reported increasing output.

With the HS2 high-speed rail line beginning to make some headway and housebuilding in a position to profit from a gentle November, the development business elevated by 3.5%, reversing a pattern of contraction courting again to Might.

The persevering with enhance in well being providers as a proportion of financial exercise was one other issue supporting the rise in GDP, the ONS stated.

In opposition to a backdrop of rising inflation and the expectation of additional rate of interest rises by the Financial institution of England, enterprise teams warned the financial system remained weak.

Suren Thiru, the pinnacle of economics on the British Chambers of Commerce, stated: “Stronger progress in November is more likely to be adopted by a modest fall in output in December and January, as shopper warning to socialize and spend, and mounting employees absences sparked by Omicron and plan B restrict exercise.

“Whereas the UK financial system ought to rebound as soon as plan B measures are lifted, surging inflation and chronic provide chain disruption might imply that the UK’s financial progress prospects stay underneath stress for a lot of 2022.”

Analysts stated that whereas the financial system had struggled to develop for the reason that summer time, there was the prospect of a return to stronger progress in 2022, albeit with shopper spending constrained by the rising value of dwelling.

ONS officers stated there was little proof from early indicators that many retailers and eating places have been pressured shut in December, although enterprise foyer teams suffered a collapse in bookings that prompted the chancellor, Rishi Sunak, to supply £1bn in further help.

Ana Boata, the pinnacle of financial analysis on the credit score insurer Euler Hermes, stated the buyer had come to the rescue of an financial system nonetheless struggling the consequences of Covid-19

“We anticipate GDP progress to hit 4.4% this 12 months, adopted by an extra 2.6% enhance in 2023. It’s not all plain crusing, although. Wages will go up about 3.5% above the pre-crisis common in 2022, in response to cost rises throughout the total financial system.

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“Regardless of the Financial institution of England anticipated to boost charges a minimum of twice this 12 months to maintain inflation in examine, households’ actual buying energy will endure, leaving extra financial savings to prop up shopper spending ranges.”

Sunak welcomed the information that Britain’s financial system was bigger than earlier than the pandemic.

“It’s wonderful to see the dimensions of the financial system again to pre-pandemic ranges in November – a testomony to the grit and dedication of the British individuals,” he stated.

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