London, 12 February 2022 (TDI): The UK economy has seen a tremendous comeback despite ongoing challenges with supply chain disruptions and COVID-19. Beating out all expectations the economy has recovered and contracted less than what was initially forecasted.

Gross Domestic Product (GDP) increased by 7.5% in 2021 compared to last year as the economy continues to rebound from the pandemic, while output fell by a minuscule 0.2% between November and December. Reuters had initially forecasted a 0.6% decline in this area. It increased by 1% in the final quarter of the year.

Darren Morgan, ONS Director of Economic Statistics said that GDP fell as a result of the Omicron variant with retail and hospitality sectors taking the biggest hits, but these setbacks were partially offset by an increase in vaccinations and test and trace services.

GDP levels in December were in line with pre-pandemic levels in February 2020. Data from the ONS also indicates that imports from non-EU countries have risen.

Retail sales fell by 3.7% while the hospitality sector saw a decline of 9.2%, arts and recreation fell by 4.4%. Manufacturing output increased by 0.2%, this increase was mainly attributed to the car and pharmaceutical sectors. Construction also saw an increase of 2%, this was led by an increase in infrastructure and new housing schemes.

The Bank of England, in its latest assessment of the economy, said that the impact of Omicron is expected to be limited and of short duration, GDP will reach normalcy in February or March, but the bank also warned that growth in 2022 might take a hit as household real income has contracted significantly because of rising inflation, increasing energy costs and a surge in tax prices.

Office for National Statistics (ONS)

The ONS is an independent producer of official statistics in the UK. It is recognized as the national statistical institute of the country.