UK economy closed pandemic gap in November – POLITICO

Figures released on Friday by the Office for National Statistics showed the British economy had outgrown its pre-pandemic size in November 2021.

Gross domestic product rose 0.9 percent in November and settled at 0.7 percent above the previous peak in February 2020.

“The economy grew robustly in the month before Omicron hit architects, retailers, couriers and accountants after seeing a bumper month,” said ONS Chief Economist Grant Fitzner, adding that construction was also boosted by the broader availability of raw materials.

The growth spurt surprised financial markets and indicated that the country was in good shape when the Omicron wave hit, through which it has remained open except for the government’s recommendation to work from home where possible. The British Pound gained value against the US Dollar and the Euro in trading right after the news.

Chancellor Rishi Sunak praised the statements as “amazing to see” and “proof of the resolve and determination of the British people.” It comes after concerns were raised that October’s week-long fuel crisis and widespread labor shortages would hurt business.

Capital Economics, a consulting firm, attributed the growth to “shortage relief” that boosted manufacturing and construction as well as an overall rise in professional activities. However, data is likely to show that the economy slumped in December and January, while rebounding from February, due to “recent signs that the Omicron wave is starting to wind down,” experts said in a report.

Meanwhile, the cost of credit is likely to rise again to stem inflation, Dutch bank ING said in its own analysis. “For the BoE, this indicates that the chances of a rate hike in February are rising.”

This article has been updated.

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