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UK economy rose above pre-pandemic levels, growing 0.9 per cent in November

The UK economy shrugged off the spectre of the Omicron Covid-19 variant to grow 0.9 percent in November, taking gross domestic product (GDP) above pre-pandemic levels.

According to the Office for National Statistics (ONS) gross domestic product (GDP) was 0.7 per cent higher than it was in February 2020; economists had predicted just 0.4 per cent growth in November.

The Omicron variant was expected by many to derail this progress in December, with the loss of momentum likely stretching into January, and many firms are reporting severe staff absences and consumers still wary of going out.

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Despite this, some health officials think the Omicron infections wave has now peaked in Britain and analysts say the hit to the economy is likely to be short-lived, allowing the Bank of England to continue raising interest rates this year.

The ONS said, data revisions aside, GDP in quarterly terms would reach or surpass its pre-coronavirus level in the October-December period of last year, as long as economic output does not fall by more than 0.2 per cent in December.

The ONS said architects, retailers, couriers and accountants had a bumper month in November and construction recovered from several weak months as raw materials became easier to source after problems in global supply chains.

However, Britain’s economy may still face challenges in the months ahead, even once coronavirus restrictions are relaxed.

Suren Thiru, head of economics at the British Chambers of Commerce, said: “While the UK economy should rebound once Plan B measures are lifted, surging inflation and persistent supply-chain disruption may mean that the UK’s economic growth prospects remain under pressure for much of 2022.”

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Victor Trokoudes, chief executive and co-founder of budgeting app Plum, also said: “In order to get us back to where we were, prices have had to rise significantly.

“In economic terms we may now be better off than we were, and this is a good thing. But be in no doubt the challenge for the rest of the year is a squeeze on spending that will put most households under great pressure, and could threaten to derail the recovery.”

Mr Trokoudes continued: “Our own research has found families are experiencing a 15 per cent spike on average in their cost of everyday essentials, way beyond what inflation is tracking.

“What is key now is for those families to make sure their money goes further, be that through better budgeting and saving, or by investing to stay ahead of inflation in the long-term.”

James Smith, research director at the Resolution Foundation, also urged caution for the months ahead.

“Today’s GDP data show an economy growing robustly on the eve of omicron, with a welcome return to pre-pandemic levels of monthly output as sectors such as retail grew rapidly,” he said.

“But more timely data show that consumer-facing services like hospitality hit a brick wall in December and January, as families become more cautious in the face of rising cases.

“This, combined with rising inflation and soaring energy bills, means we may need to work back towards this November peak of output in early 2022.”

Rishi Sunak, the Chancellor of the Exchequer, said: “It’s amazing to see the size of the economy back to pre-pandemic levels in November – a testament to the grit and determination of the British people.”



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