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- The most recent estimates from the ONS counsel the UK economic system grew by 1.0% within the fourth quarter of 2021, considerably weaker than anticipated. We now anticipate development of 1.0% within the first quarter of 2022.
- Nevertheless, the financial affect of Omicron has been far lower than that of both of the 2 earlier main waves of Covid-19. The 0.2% drop in GDP in December was steeper than the consensus forecast, however consistent with the NIESR’s January GDP tracker, suggesting the potential of a constructive January studying.
- Retail and hospitality contributed probably the most to December’s fall, with the healthcare sector making the biggest constructive contribution.
- The UK economic system grew by 7½% in 2021 after a 9½% drop in 2020, however GDP within the 3 months to December was nonetheless round 0.5% under pre-pandemic ranges.
“Omicron’s financial affect was far decrease than both of the 2 earlier main waves of Covid-19: a decline of simply 0.2% in December was even stronger than consensus forecasts, however consistent with NIESR’s January GDP tracker, suggesting the potential of a constructive January studying.Unsurprisingly, retail and hospitality had been the most important contributors to December’s fall, with the healthcare sector contributing the larger constructive contribution.
Rory MacQueen
Principal Economist – Macroeconomic Modeling and Forecasting
