- The latest figures suggest that GDP is £50 billion larger than previous estimates
The UK economy has outperformed France and Germany in recovering from the pandemic, revised official figures revealed yesterday.
They show that by the middle of this year, GDP was 1.8 per cent greater than pre-Covid levels – meaning it was £50 billion larger than previous estimates.
Chancellor Jeremy Hunt said the report from the Office for National Statistics (ONS) “proves the doubters wrong”.
Before now, the Office for National Statistics estimates the economy is still 0.2 per cent smaller than it was before the pandemic, putting the UK at the bottom of the table among major advanced economies.
But the revised figures mean Britain outperformed Germany, which grew by 0.2 per cent after the same period, and France, which rose by 1.7 per cent.
However, the UK’s recovery is still in the bottom half of the G7 and lags far behind the US – which saw a 6.1 per cent recovery – and Canada, Japan and Italy are also stronger.
The ONS was widely expected to be upgraded yesterday following the publication of revisions to previous years’ GDP data earlier this month. It showed that the economy’s performance in 2020 and 2021 was better than thought, meaning that by the end of 2021 it was already greater than pre-pandemic levels.
Yesterday’s data showed that in 2022 the UK economy grew by 4.3 percent instead of 4.1 percent.
In the first quarter of this year, GDP rose by 0.3 percent, up from 0.1 percent. In the second quarter, it grew by an unrevised 0.2 percent.
Together, the revisions left the economy 1.8 percent larger than pre-pandemic levels by the end of June rather than 0.2 percent smaller. “This adds around £50 billion to UK GDP,” said Thomas Pugh, an economist at accountancy firm RSM UK.
This provides a boost for Prime Minister Rishi Sunak ahead of the Conservative Party conference.
“People are doubting the strength of the economy – and today’s data proves them wrong,” Sunak said.
However, economists noted that the current outlook for growth remains sluggish. Separate figures published yesterday from the bank showed that the number of mortgage loans approved last month fell to 45,400, its lowest level in six months.
Recent business surveys suggest that the economy may have contracted in the current third quarter – raising fears of a recession.
Ruth Gregory, deputy chief UK economist at Capital Economics, said the improved GDP data “does not change the big picture that the economy has lagged behind all the other G7 countries except Germany and France.”
Sandra Horsfield, economist at Investec, said: “We continue to expect that the UK economy will enter a recession during the winter months.”
“The best way to continue this growth is to stick to our plan to halve inflation this year,” the Chancellor said.