UK economy still 'middle of the pack' despite 7.5% growth

/ 11th February 2022 /

The UK economy expanded by 7.5% last year, the fastest rate of GDP growth among G7 nations in that period, according to the Office of National Statistics (ONS), whose director of economic statistics warned Britain remains "middle of the pack" compared to the other richest nations.

The rebound comes after the British economy contracted 9.4% in 2020, with the statistics showing GDP growth of 1% in the final three months of 2021 when the UK and the wider world were in the grips of the Omicron wave.

In December, however, the UK economy contracted 0.2%, beating economist expectations of -0.6%, as good shortages in the run-up to Christmas and a record number of job vacancies halted momentum built up in November (+0.9%).

Darren Morgan blamed Omicron for the 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," he added

"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," Morgan said.

"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 in 2019.

City of London economists predicted the UK economy would shrink by more than it did in December. (Pic: Getty Images)

The UK's GDP growth outstripped that of the US (+5.4%), France (+7%), Germany (+2.7%), and Italy (+6.5%) and the EU as a whole (+5.2%), with Canada and Japan still to release 2021 GDP data.

Speaking on BBC Radio 4's Today programme, Morgan explained that the growth seen in 2021 was possible because the UK economy had been hit so hard by the pandemic in 2020 and that it was rebuilding from a "low base".

"The growth in 2021 comes from a low base in 2020 when the UK economy fell sharply," he said. "If you look at where the UK economy is now, compared to its pre-pandemic level, which I know a lot of people do for a broader picture of the economy, the UK is middle of the pack compared with the G7.

"With the US, Canadian and French economies above the UK’s, but the UK is above Italy, Germany and Japan."

While the UK economy remains 0.4% smaller than it was at the end of 2019, GDP in the US, France and Canada now exceeds pre-coronavirus levels.

(Pic: Getty Images)