UK economy SHRANK by 0.2 per cent in December amid Omicron surge
UK economy SHRANK by 0.2 per cent in December amid Omicron surge… but the hit was not as bad as feared as GDP clawed back 7.5% in the whole of 2021
UK economy shrank by 0.2 per cent in December but not as much as was fearedThe Omicron surge hammered businesses in the crucial pre-Christmas periodOver the whole of 2021 the economy clawed back 7.5 per cent of Covid plunge
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The UK economy shrank by 0.2 per cent in December amid the Omicron surge – but the hit was not as bad as feared.
Official figures showed the variant hammered activity in the crucial pre-Christmas period – with the Bank of England predicting inflation will continue to surge and weigh down growth over the coming months.
But the drop in GDP in December was less than the 0.5 per cent pencilled in by analysts. Across the whole of 2021 the UK clawed back 7.5 per cent of the plunge during the pandemic – and is now roughly at the same level as February 2020.
Chancellor Rishi Sunak said he was ‘proud’ the vaccine programme had ‘allowed the economy to stay open’.
Official figures showed the variant hammered activity in the crucial pre-Christmas period
Office for National Statistics spokesman Darren Morgan said: ‘GDP fell back slightly in December as the Omicron wave hit with retail and hospitality seeing the biggest impacts.
‘However, these were partially offset by increases in the Test and Trace service and vaccination programmes.
‘Despite December’s setback, GDP grew robustly across the fourth quarter as a whole with the NHS, couriers and employment agencies all helping to support the economy.
‘Overall, GDP in December was in line with its level in February 2020, before COVID-19 struck, while in the fourth quarter as a whole, it was slightly below that of Quarter 4 2019.’
Mr Sunak said: ‘Thanks to our £400billion package of support and making the right calls at the right time, the economy has been remarkably resilient; with the UK seeing the fastest growth in the G7 last year and GDP remaining at pre-pandemic levels in December.
‘I’m proud of the resolve the whole country has demonstrated, and proud of our incredible vaccine programme which has allowed the economy to stay open.
Chancellor Rishi Sunak said he was ‘proud’ the vaccine programme had ‘allowed the economy to stay open’
‘We’re continuing to help the economy rebuild through our Plan for Jobs, boost for business investment and support for households with the cost of living.’
Shadow Treasury minister Pat McFadden said: ‘The reality is the way the Government runs our economy is trapping us in a high tax, low growth cycle.
‘Despite government bluster, with their current plans our position is not expected to improve. The latest Bank of England forecast suggests that growth will slow to a crawl next year. That would be the slowest growth of any G7 economy.
‘Rising taxes, rising prices, and a squeeze on wages and living standards sit squarely on the shoulders of the Conservatives.’
