UK economy grew more quickly than thought in late 2021

Shoppers at Oxford Street in central London. — AFP

LONDON: Britain's economy grew more quickly than previously thought in the last three months of 2021 when the country was hit by the Omicron wave of COVID-19 cases, driven by higher health spending, official data showed on Thursday.

Gross domestic product in the world's fifth-biggest economy increased by 1.3% in the fourth quarter from the previous three-month period, the Office for National Statistics said, stronger than a preliminary estimate of growth of 1.0%.

The ONS said the largest contributors to the increase came from human health and social work activities, driven by increased visits to doctors at the start of the quarter, as well as a large increase in coronavirus testing and tracing and the extension of the vaccination programme

That represented an acceleration from the economy's 0.9% growth in the third quarter but was well below its 5.6% expansion in the April-June period of last year when it was rebounding from COVID-19 lockdowns.

Investors expect the recovery to slow in 2022 as inflation heads for almost 9% and households face the biggest fall in living standards since at least the 1950s, according to forecasts by the government's fiscal watchdog.

Households dipped into their lockdown savings to finance their spending. The saving ratio fell to 6.8% of disposable income from 7.5% in third second quarter, approaching its level of 6.0% immediately before the pandemic, the ONS said.

The level of GDP at the end of 2021 was 0.1% below where it was at the end of 2019, revised from a previous estimate of 0.4% below its pre-pandemic level. - Reuters