Jeremy Hunt hails huge GDP upgrade showing the UK bounced back from Covid faster than France, Germany, Italy and Japan – recovering all lost ground by the end of 2021
Jeremy Hunt today hailed the debunking of Britain’s reputation for having the slowest bounceback from Covid.
Official figures previously showed that UK plc was still 1.2 per cent smaller by the end of 2021 than immediately before the pandemic hit.
That led to questions about why the economy was performing so much worse than rivals – with Brexit often blamed.
However, the Office for National Statistics (ONS) has now overhauled the numbers after finding that companies spent more and had more stock than previously thought.
In fact, the ONS believes GDP – a measure of activity – was 0.6 per cent bigger than before Covid by the fourth quarter of 2021.
A jubilant Chancellor said ‘once again those determined to talk down the British economy have been proved wrong’.
A jubilant Chancellor said ‘once again those determined to talk down the British economy have been proved wrong’
The ONS now believes GDP – a measure of activity – was 0.6 per cent bigger than before Covid by the fourth quarter of 2021
The revisions cast a new light on the UK’s bounceback from the pandemic – previously thought to be much weaker than the rest of the G7
The change casts a new light on the UK’s resilience to the pandemic.
Data had been showing that even as of the second quarter of this year real GDP was still 0.2 per cent below the level at the end of 2019.
By contrast the US was 6.2 per cent bigger than before Covid, the Eurozone 2.7 per cent and France 1.7 per cent.
It remains to be seen how the upgrade will affect the UK figures since 2021, as it takes the ONS time to assemble the more accurate ‘Blue Book’ numbers.
However, it suggests the economy has been faring better than expected.
Mr Hunt said: ‘The fact that the UK recovered from the pandemic much faster than thought shows that once again those determined to talk down the British economy have been proved wrong.
‘There are many battles still to win, most of all against inflation so we can ease cost of living pressures on families.
‘But if we stick to the plan we can look forward to healthy growth which according to the IMF will be faster than Germany, France, and Italy in the long term.’
In a blog, ONS Head of National Accounts Craig McLaren said: ‘The UK economy has recently been through unprecedented times, first with the COVID-19 pandemic in 2020 and 2021 – that led to the biggest fall in GDP ever seen – followed closely by the impact of the Ukraine War from 2022 – which has seen prices rise at their fastest rate for over 40 years.’
Data had been showing that even as of the second quarter of this year real GDP was still 0.2 per cent below the level at the end of 2019
He added: ‘Producing estimates of GDP in unprecedented times, when much of these data we need to produce complete national accounts are not available for a couple of years after the event is clearly a challenge.
‘We are among the first of our international colleagues to update our initial estimates with more detailed data.
‘We will continue to review our assumptions, methods and sources to produce the best estimates of changes in the UK economy as soon as possible.’