Official estimates reveal that the UK economy grew by 7.5 percent last year, despite a drop in December owing to Omicron limitations.
It was the fastest rate of growth since 1941, but it followed a 9.4 percent drop in 2020 when the epidemic pushed portions of the economy to close.
The economy declined 0.2 percent in December as Omicron restrictions impacted the hotel and retail industries.
Chancellor Rishi Sunak described the economy as “remarkably resilient”
According to the Office for National Statistics (ONS), growth was 1% in the last three months of 2021, which ONS head of economic statistics Darren Morgan described as “pretty healthy” given Omicron’s proliferation and the implementation of some limitations.
“Today’s figures show that the economy was remarkably resilient despite Omicron,” Mr Sunak told the BBC. Last year, we were the fastest-growing economy in the G7, and this year we are expected to continue to be the fastest-growing economy. But I understand that people are concerned about rising prices, particularly for energy bills… that’s why, only last week, we unveiled a large package of assistance to help millions of families meet their financial obligations.”
Last year’s rise was the greatest since the ONS began keeping statistics in 1948, and the quickest since 1941, when the Bank of England began collecting data during World War II. The 9.4% decline in 2020 was the largest since 1919, when the country was demobilized following World War One.
In 2022, the economy is projected to experience challenges. The Bank of England hiked interest rates last week, lowered its economic growth prediction for this year from 5% to 3.75 percent, and warned that people would see the steepest drop in living standards since records began three decades ago.
According to Pat McFadden, Labour’s shadow chief secretary to the Treasury, the economy will “crawl” this year, with the worst growth of any G7 countries. “The reality is the way the government runs our economy is trapping us in a high tax, low growth cycle,” he added.
In April, inflation is expected to reach 7%, the same month that employees and businesses will begin to experience increases in their National Insurance (NI) contributions. Mr Sunak has under pressure to cancel the NI hike, but he has stated that it would go forward this month.
RSM UK economist Thomas Pugh predicted that output lost in December and January will be restored in February and March, “meaning that Omicron should not have had a lasting impact on the economy”
However, he predicted that consumer purchasing power would plummet in 2002.