LONDON: The UK economy rebounded last year with growth of 7.5 per cent despite falling back in December due to Omicron restrictions, official figures show.
It was the fastest pace of growth since 1941, although it came after a dramatic 9.4pc collapse in 2020 as the pandemic forced parts of the economy to shut.
In December, the economy shrank 0.2pc as Omicron restrictions hit the hospitality and retail sectors.
Chancellor Rishi Sunak said the economy had been “remarkably resilient”.
The Office for National Statistics (ONS) figures showed that in the last three months of 2021 growth was 1pc, which ONS director of economic statistics Darren Morgan said was “pretty healthy” given Omicron’s spread and the introduction of some restrictions.
The figures were stronger than expected, and Morgan told the BBC the expansion in 2021 showed the UK was the fastest growing economy in the G7 group of nations. However, he urged caution about making strict comparisons.
The ONS said that despite the fall in December, on a monthly basis GDP was in line with its pre-coronavirus level in February 2020.
However, GDP in the October-to-December quarter remains 0.4pc below its pre-Covid levels in the final three months of 2019.
Last year’s growth was the strongest since ONS records began in 1948 and the fastest since 1941, during the Second World War, using data collected by the Bank of England.
The slump of 9.4pc in 2020 was the biggest drop since 1919 when there was demobilisation after the first World War.
The economy is expected to face headwinds in 2022. Last week, the Bank of England raised interest rates, cut its economic growth forecast from 5pc to 3.75pc for this year and predicted that households were about to suffer the sharpest fall in living standards since records began three decades ago.
Inflation is forecast to hit 7pc in April, the same month workers and firms will start to see a rise in their National Insurance (NI) contributions.
Thomas Pugh, an economist at RSM UK, said he expected output lost during December and January to be regained in February and March, “meaning that Omicron should not have had a lasting impact on the economy”.
But he warned that consumer spending power would take a big hit.
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