- Written by Karen Hoggan & Faisal Islam
- BBC Business Correspondent and Economics Editor
image source, Getty Images
The UK economy showed a stronger recovery from the coronavirus outbreak at the end of 2021 than previously expected, according to heavily revised official figures.
The data revealed that the economy expanded by 0.6% in the last three months of 2021 compared to pre-pandemic levels.
Previous statistics showed the UK economy had shrunk by 1.2%.
The government said: “Those determined to undermine the UK economy have been proven wrong.”
The Office for National Statistics said the main reason for the change was because there was “richer data” from the annual survey.
The revised figures also show that the economic collapse due to pandemic lockdowns was smaller than thought in 2020, with output falling by 10.4% instead of 11%.
The recovery in 2021 was also faster, with growth at 8.7% instead of 7.6%.
Recently, the ONS said that between April and June this year the UK economy remained weaker than in the last three months of 2019 (the last quarter before Covid-19 emerged in March next year). It was estimated that the decline was 0.2%.
This meant the UK was at the bottom of the major G7 economies in terms of recovery from the pandemic.
However, the upward revision could mean the UK economy will be doing much better than Germany and just behind France and Italy by the time the ONS releases its latest figures.
Prime Minister Jeremy Hunt said: “The fact that the UK has recovered much faster than expected from the pandemic shows that those determined to undermine the British economy have once again been proven wrong. “There are still many battles to be won, especially against inflation,'' he said. This will reduce the burden of living expenses on your family. ”
“A lasting impact”
The difference between contraction and growth in the UK economy at the end of 2021 is significant, but needs to be seen in the context of the large-scale fluctuations of the pandemic.
The ONS said the main reason for the change was that businesses were building up unsold stock during the pandemic rather than depleting it.
There has also been an increase in the calculation of output by health services, particularly the NHS.
The net result of all this is that by 2022, the UK will no longer be an outlier within the G7 in terms of pandemic damage. In fact, the UK economy suffered much the same damage as other major European countries.
Only the UK and the US have made any changes to their 2021 economic data.
This is not the case in countries such as Germany, France, and Italy. If they choose, they could show that economic performance is worse or better than initially thought.
Nevertheless, the ONS' revisions provide important insight into the lasting impact of the pandemic on the UK economy.
The impact was not as great as initially feared. But little has been said about what has happened since then, mostly about the current economy, which has been hit by energy shocks and rising interest rates.
