The UK economy saw a rapid 0.9% growth spurt in November, making it bigger now than before the pandemic | Currency News | Financial and Business News
- The UK economy is now bigger than it was before the pandemic started, after strong growth in November.
- Gross domestic product, or GDP, grew 0.9% in November, up from 0.2% in October and above expectations.
- Yet the arrival of the Omicron variant is expected to have weighed on the economy in December and January.
The UK’s gross domestic product is now bigger than it was before the coronavirus pandemic struck and wreaked havoc on the economy, following a strong bout of growth in November.
The country’s GDP — the most common measure of the size of the economy — grew 0.9% in November month-on-month, the Office for National Statistics said Friday.
It was a much stronger reading than both the 0.4% expected by economists and October’s 0.2% expansion.
The growth took UK GDP to 0.7% above where it stood in February 2020, just before coronavirus started ripping through the country and the government clamped down on economic activity.
However, November was the last month before the Omicron coronavirus variant took hold in the UK and prompted Downing Street to put in place new restrictions. Staff absences are expected to have weighed on growth in December and January.
November saw stronger-than-expected performances from both the construction and manufacturing sectors, which posted growth of 3.5% and 1.1% respectively. Retail also helped services expand relatively strongly.
British Chancellor Rishi Sunak said: “It’s amazing to see the size of the economy back to prepandemic levels in November — a testament to the grit and determination of the British people.”
The finance minister urged people to go out and get their booster shot, saying this would help the UK economy to continue to grow.
Susannah Streeter, senior markets analyst at broker Hargreaves Lansdown, said: “The UK economy was in fitter form than expected before Omicron hit.
“With Omicron expected to be a short sharp shock rather than a lingering malaise, this November snapshot is likely to be taken as more evidence that once infection rates subside, the economy will be in good enough shape to withstand further interest rate rises.”
The Bank of England raised interest rates in December in an effort to tamp down on the strongest inflation in a decade. Analysts expect the central bank to hike them again in the coming months.
“A February Bank of England rate hike is growing more likely,” said James Smith, developed markets economist at Dutch bank ING. The next BoE decision is due on 3 February.