According to new estimates, the UK economy grew at a slower rate than previously thought between July and September.
As Britain emerged from lockdown, the Office for National Statistics (ONS) reported that the GDP increased by 1.1 per cent, rather than 1.3 per cent, in the quarter before Omicron seized hold.
It cited lower consumer spending as well as the impact of energy firms going out of business as reasons for the decline.
The GDP has shrunk by 1.5 per cent since the coronavirus outbreak began.
The data predates the discovery of the Covid-19 Omicron version, which is projected to slow growth even further.
“Our revised figures show UK GDP recovered a little slower in the third quarter, with much weaker performances from health and hairdressers across the quarter, and the energy sector contracting more in September than we previously estimated,” said Darren Morgan, director of economic statistics at the ONS.
“With the economy reopening in the third quarter, households saved less in the latest period. However, household saving was still up on pre-pandemic levels.”
Over 20 energy providers, largely small businesses, have declared bankruptcy in recent months as wholesale gas costs have risen, making pricing commitments to customers unattainable.
Since the start of the pandemic, about four million more families have seen their supplier collapse, and about 15 million individuals will experience a big increase in their bills in April.
The lowered growth projection was also influenced by weakness in the health sector, where test and trace work and immunizations declined, as well as among hairdressers.
Mr Morgan, on the other hand, said the stronger figures for 2020 indicated that the economy was closer to pre-pandemic levels than previously believed. The economy of the United Kingdom contracted by 9.4% last year, rather than 9.7%, as previously thought.
In the three months leading up to September, business investment declined by 2.5 per cent, putting it about 12 per cent below its pre-pandemic level.
However, investors are expecting a further downturn in GDP in the fourth quarter of 2021, as well as a dismal start to 2022, due to the spike of Covid-19 cases, which has harmed the hospitality industry and retailing business in the UK.
Even though the economy had improved its ability to cope with coronavirus constraints, Bethany Beckett, an economist at Capital Economics, stated the “possibility of stronger restrictions in January is further depressing the outlook for GDP.”
In inflation-adjusted terms, Britain’s recovery to pre-pandemic levels behind most other major rich countries, including France, Germany, and the United States, according to the ONS.
(Adapted from DailyMail.co.uk)