- By Karen Hoggan & Faisal Islam
- BBC enterprise report and economics editor
Image supply, Getty Images
The UK economy made a stronger recovery during Covid on the finish of 2021 than beforehand estimated, in keeping with sharply revised official figures.
Data has now revealed that the economy was 0.6% greater within the closing three months of 2021 in comparison with pre-pandemic ranges.
The earlier figures stated that the UK economy was 1.2% smaller.
The authorities stated it confirmed “those determined to talk down the British economy have been proved wrong”.
The Office for National Statistics stated adjustments have been primarily as a result of it had “richer data” from its annual survey.
The revised figures additionally present the pandemic lockdown collapse within the economy was smaller than thought in 2020, with output declining by 10.4% slightly than 11%.
The recovery in 2021 was additionally quicker with progress of 8.7% slightly than 7.6%.
Recently, the ONS estimated that between April and June this yr, the UK economy was nonetheless 0.2% smaller than the ultimate three months of 2019 – the final full quarter earlier than Covid struck the next March.
This meant the UK was on the backside of the most important G7 economies by way of its recovery from the pandemic.
However, the upward revision might now imply that the UK economy is performing significantly better than Germany and is just simply behind France and Italy when the ONS releases its newest figures.
Chancellor Jeremy Hunt stated: “The fact that the UK recovered from the pandemic much faster than thought shows that once again those determined to talk down the British economy have been proved wrong. “There are many battles nonetheless to win, most of all towards inflation so we are able to ease price of dwelling pressures of households.”
‘Lasting influence’
While the distinction between how a lot the UK economy shrank and grew on the finish of 2021 is big, it must be considered within the context of large pandemic swings.
The ONS stated a key cause for the change was that corporations had piled up unsold shares within the pandemic slightly than run them down.
It additionally elevated its calculation for output by well being providers, notably the NHS.
The web results of all that is that by 2022, the UK was not the outlier inside the G7 by way of the injury executed by the pandemic. In truth, the UK economy was hit just about consistent with the opposite main European nations.
Only the UK and the US have made any adjustments to their 2021 financial information.
The likes of Germany, France and Italy haven’t. If they select to, it might present their financial efficiency was worse than initially thought – or higher.
Nonetheless, the revision by the ONS provides an essential perception into the lasting influence of the pandemic on the UK economy.
It was impacted lower than initially feared. But it doesn’t inform us a lot in regards to the economy proper now, hit by an power shock and rising rates of interest, which occurred virtually fully after this revision.
