UK economy growing faster than thought, ONS says

theguardian.com:

The UK economy was only 0.1% below pre-pandemic levels after growing faster than previously thought at the end of 2021 because of an increase in visits to GPs and a rush of coronavirus test and trace activities, the latest official data has shown.

UK economic output grew by 1.3% from October to December, compared to a first estimate of 1%, despite the Omicron variant denting output over Christmas, the Office for National Statistics (ONS) said on Thursday.

Revisions to estimated growth in 2021 and 2020 mean the economy is now thought to have ended 2021 only 0.1% shy of its pre-Covid-19 level, compared to a previous estimate of 0.4%. However, increased government spending has made up much of the shortfall, and growth remains well off the trend that would have been expected before the pandemic began.

The government ordered a surge of coronavirus testing and a huge programme of booster vaccine shots at the end of November as the Omicron variant spread. That in turn required a large rise in government spending, which sustained economic output.

The pandemic lockdowns caused the biggest economic recession since comparable records began, followed by the fastest annual economic growth since the second world war in 2021.

The huge volatility in output has caused the UK’s statisticians difficulties in measuring the economy, and the ONS has warned of larger than usual revisions. On Thursday it said the 2020 recession was slightly less severe than expected, with a decline of 9.3%, meaning the recovery through 2021 was slightly smaller, at 7.4%.

The data showed that household consumption is now 1.1% below its pre-coronavirus level, after a downward revision that comes as consumers face rising prices of energy and basic goods that have