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11 Feb, 2022 10:16

UK economic growth compared to WWII levels

Despite strong growth, British GDP is yet to reach pre-pandemic levels
UK economic growth compared to WWII levels

The British economy grew by 7.5% in 2021, following a slump of nearly 10% the year before when Covid-19 lockdowns and enduring restrictions disrupted economic activity, the Office for National Statistic (ONS) said on Friday. 

The figure represents the strongest gross domestic product (GDP) growth since 1941, when Britain and its empire was in the midst of a six-year war against Nazi Germany, fascist Italy, and their allies. 

The record growth came in spite of a 0.2% contraction in December as the Omicron variant of Covid-19 triggered tougher restrictions and kept consumers at home in the runup to Christmas. The UK also started 2021 with a prolonged lockdown as Covid case numbers soared in January and record hospitalizations put the NHS under severe pressure. 

At the end of 2021, the economy remained 0.4% smaller than in the fourth-quarter 2019 level as the UK lagged some of its G7 peers. In the US, GDP is already 3.1% above its pre-Covid peak. Italy, Japan, and Germany lag further behind their 2019 levels. 

ONS data also shows that Britain is trading more with the rest of the world than the EU for the first time. Imports from non-EU countries were higher for 12 consecutive months following the introduction of Brexit controls and heightened fuel costs, amid increasing trade volume with hydrocarbon producers.

“With the ongoing coronavirus pandemic and recession, it is difficult to assess the extent to which these trade movements reflect short-term trade disruption or longer-term supply chain adjustments,” the ONS said. 

Rishi Sunak, Chancellor of the Exchequer, reacted positively to the GDP data, praising his government for supporting the UK in its drive to be the fastest-growing G7 nation. 

The positive figure comes amid inflation levels not seen in the UK for decades and a real squeeze on household disposable income. A proposed rise in national insurance contributions is likely to put more pressure on Britons.