UK economy has outdone France and German following pandemic
UK economy has outdone France and Germany in recovering from the pandemic, official figures suggest
- Latest figures imply that GDP is £50 billion larger than previous estimates
The UK economy has outperformed both France and Germany in recovering from the pandemic, revised official figures revealed yesterday.
They show that by the middle of this year, GDP was 1.8 per cent larger than pre-Covid levels – implying it is £50 billion bigger than previous estimates.
Chancellor Jeremy Hunt said the report from the Office for National Statistics (ONS) ‘proves the doubters wrong’.
Before now, ONS estimates had suggested that the economy was still 0.2 per cent lower than pre-pandemic, placing the UK bottom of the table among major advanced economies.
But the revised figures mean that Britain has outpaced Germany, which grew by 0.2 per cent after the same period, and France, up 1.7 per cent.
Chancellor Jeremy Hunt said that the Office of National Statistics (ONS) report proved ‘the doubters wrong’
However, the UK’s recovery is still in the lower half of the G7 pack and lags well behind the US – which has seen a 6.1 per cent bounce back – with Canada, Japan and Italy also stronger.
Yesterday’s ONS upgrade was widely expected after revisions to GDP data for previous years were published earlier this month. They showed that the economy had done better in 2020 and 2021 than thought, meaning that by the end of 2021 it was already larger than pre-pandemic levels.
Yesterday’s data showed that in 2022 the UK economy grew by 4.3 per cent rather than 4.1 per cent.
And in the first quarter of this year GDP increased by 0.3 per cent, revised up from 0.1 per cent. In the second quarter it grew by an unrevised 0.2 per cent.
Together, the revisions left the economy 1.8 per cent larger than pre-pandemic levels by the end of June rather than 0.2 per cent smaller. Thomas Pugh, economist at accounting firm RSM UK, said: ‘That adds around £50 billion to UK GDP.’
It provides a boost for Prime Minister Rishi Sunak ahead of the Conservative Party conference.
Mr Sunak said: ‘People doubted the strength of the economy – today’s data proves them wrong.’
However, economists pointed out that the current outlook for growth remained sluggish. Separate figures published yesterday, from the Bank, showed the number of mortgages approved last month fell to 45,400, a six-month low.
The latest figures will provide the Prime Minister with a much welcome boost ahead of the Conservative Party conference
And recent business surveys suggest the economy may have shrunk in the current third quarter – raising recession fears.
Ruth Gregory, deputy chief UK economist at Capital Economics, said the upgraded GDP data ‘does not change the big picture that the economy has lagged behind all other G7 countries aside from Germany and France’.
Investec economist Sandra Horsfield said: ‘We continue to forecast that the UK economy will enter a recession over the winter months.’
The Chancellor said: ‘The best way to continue this growth is to stick to our plan to halve inflation this year.’
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