Brussels (Brussels Morning) The British economy reached pre-pandemic levels in November according to data released by the Office for National Statistics (ONS) today.
The ONS pointed out that GDP grew 0.9% in November last year, exceeding expectations as well as February 2020 levels, Reuters reports.
Economists who took part in the poll expected British GDP to grow 0.4% in November.
The UK’s Chancellor of the Exchequer, Rishi Sunak, said it was “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.”
The UK economy contracted more than 9% in 2020, more than most large economies. Currently, the majority of the richest countries have already reached their pre-coronavirus crisis levels.
While the November results are positive, British GDP likely took a hit in December as many companies reported staff absences and low traffic. Data released on Thursday showed record levels of staff absence at the end of 2021.
On the plus side, health officials expect that the latest wave of coronavirus infections has peaked in the UK. Analysts now predict that negative the effects will be short-lived and that should allow the Bank of England (BoE) to continue tightening policies this year.
The ONS pointed out that GDP would exceed pre-coronavirus crisis levels in Q4 of last year if the economy does not contract more than 0.2% in December. According to the BoE, British GDP should return to pre-pandemic levels in Q1 of this year.
The Statistics Office also noted that November had been good for retailers since many shoppers decided to buy Christmas presents early. Moreover, the civil engineering sector recovered as global supply chains have been stabilizing and raw materials are becoming more accessible.
The inflation rate in the UK is expected to exceed 6% in April this year, reaching a 30-year high, as energy prices are expected to continue growing and social security contributions will go up in April. Suren Thiru, head of economics at the British Chamber of Commerce, predicted that “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.”