Britain’s economy rebounded much more than expected in January from its coronavirus-related lull in late 2021, according to data released this morning
The Office for National Statistics said gross domestic product grew by 0.8% in month-on-month terms in January after a 0.2% decline in December
All the main sectors of Britain’s economy grew by more than expected after the Omicron wave of coronavirus hurt the economy in December, with the wholesale and retail sector as well as pubs and restaurants being particular drivers, the ONS said.
The British economy now stands 0.8% larger than its pre-pandemic level in February 2020 but it remains about 4% smaller than if it had continued growing at its trend rate for the last decade
Britain’s economy faces significant uncertainty due to Russia’s invasion of Ukraine, The Chancellor Rishi Sunak said after the release of stronger-than-expected growth data for January.
“We know that Russia’s invasion of Ukraine is creating significant economic uncertainty and we will continue to monitor its impact on the UK, but it is vital that we stand with the people of Ukraine to uphold our shared values of freedom and democracy and ensure Putin fails,” Sunak said.
Alpesh Paleja, CBI Lead Economist, said:
“Omicron continued to weigh on growth at the start of the year. While the economy has recovered since, it’s clear that causes for concern are growing quickly. Conflict in Ukraine is putting considerable pressure on energy and commodity prices, which, if sustained, will push inflation even higher than expected. The need to press ahead with deploying new power generation through renewables, nuclear and increasing storage capacity, remains acute.
“Beyond the immediate challenges we face, urgent action is needed to push the UK onto a higher growth trajectory. The priority must be a relentless focus on investment-led growth, through introducing a permanent replacement for the super-deduction, and reforming the tax system to incentivise green capital spending.”
TUC General Secretary Frances O’Grady said:
“Our economy grows best when working people get more pounds their pocket to go out and spend. But real wages are falling, prices are surging and the illegal war in Ukraine is pushing us deeper into a cost of living crisis.
“Without government action, families will get poorer, spending will fall, and our economy will run into trouble.
“The Chancellor must come forward with a plan to get wages rising at the spring statement And he must get urgent help to families and businesses hit by soaring energy costs.”
