The UK financial system has outperformed each France and Germany in recovering from the pandemic, revised official figures revealed yesterday.
They present that by the center of this yr, GDP was 1.8 per cent bigger than pre-Covid ranges – implying it’s £50 billion larger than earlier estimates.
Chancellor Jeremy Hunt mentioned the report from the Workplace for Nationwide Statistics (ONS) ‘proves the doubters flawed’.
Prior to now, ONS estimates had advised that the financial system was nonetheless 0.2 per cent decrease than pre-pandemic, inserting the UK backside of the desk amongst main superior economies.
However the revised figures imply that Britain has outpaced Germany, which grew by 0.2 per cent after the identical interval, and France, up 1.7 per cent.
Chancellor Jeremy Hunt mentioned that the Workplace of Nationwide Statistics (ONS) report proved ‘the doubters flawed’
Nevertheless, the UK’s restoration continues to be within the decrease half of the G7 pack and lags effectively behind the US – which has seen a 6.1 per cent bounce again – with Canada, Japan and Italy additionally stronger.
Yesterday’s ONS improve was extensively anticipated after revisions to GDP knowledge for earlier years have been printed earlier this month. They confirmed that the financial system had finished higher in 2020 and 2021 than thought, that means that by the top of 2021 it was already bigger than pre-pandemic ranges.
Yesterday’s knowledge confirmed that in 2022 the UK financial system grew by 4.3 per cent quite than 4.1 per cent.
And within the first quarter of this yr GDP elevated by 0.3 per cent, revised up from 0.1 per cent. Within the second quarter it grew by an unrevised 0.2 per cent.
Collectively, the revisions left the financial system 1.8 per cent bigger than pre-pandemic ranges by the top of June quite than 0.2 per cent smaller. Thomas Pugh, economist at accounting agency RSM UK, mentioned: ‘That provides round £50 billion to UK GDP.’
It offers a lift for Prime Minister Rishi Sunak forward of the Conservative Social gathering convention.
Mr Sunak mentioned: ‘Individuals doubted the power of the financial system – at the moment’s knowledge proves them flawed.’
Nevertheless, economists identified that the present outlook for progress remained sluggish. Separate figures printed yesterday, from the Financial institution, confirmed the variety of mortgages permitted final month fell to 45,400, a six-month low.
The most recent figures will present the Prime Minister with a a lot fine addition forward of the Conservative Social gathering convention
And up to date enterprise surveys counsel the financial system could have shrunk within the present third quarter – elevating recession fears.
Ruth Gregory, deputy chief UK economist at Capital Economics, mentioned the upgraded GDP knowledge ‘doesn’t change the large image that the financial system has lagged behind all different G7 nations other than Germany and France’.
Investec economist Sandra Horsfield mentioned: ‘We proceed to forecast that the UK financial system will enter a recession over the winter months.’
The Chancellor mentioned: ‘One of the simplest ways to proceed this progress is to stay to our plan to halve inflation this yr.’
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