Summer GDP downgraded: Britain’s economy was spluttering… even before Omicron hit, latest figures show
The economy grew more slowly than initially thought even before Omicron hit, new figures show.
Growth was just 1.1pc between July and September, according to data from the Office for National Statistics (ONS) – not the 1.3 per cent estimated previously.
And it revised up last year’s disastrous figures that show the UK took a battering from the pandemic.
Slowing: Growth was just 1.1% between July and September, according to data from the Office for National Statistics – not the 1.3% estimated previously
It now thinks the economy shrank by 9.4 per cent in 2020, rather than 9.7 per cent. These changes meant output was down 1.5 per cent on pre-pandemic levels by the third quarter of the year, rather than 2.1 per cent.
But more recent data looks gloomy. Separate figures from the Confederation of British Industry (CBI) showed growth in the private sector sliding in the three months to December.
And Ryanair, the budget airline, is on course for an annual loss of between £212million and £382million, double an earlier forecast. It blamed travel restrictions in France, Germany and Morocco.
Alpesh Paleja, lead economist at the CBI, said: ‘Substantial challenges remain for businesses heading into Christmas.’
He said labour and materials shortages, rising costs and new Covid measures restrict firms’ ability to trade in this period, which is often a time when many make a big proportion of their annual profits.
‘With uncertainty rising, associated with the sharp rise in Omicron cases, it’s no surprise the near-term growth outlook has dampened,’ he added.
Prime Minister Boris Johnson has ruled out new Covid measures in England before Christmas, but might have to act afterwards.
Scotland and Wales have tightened controls. Bethany Beckett, economist at consultancy Capital Economics, said the prospect of tighter curbs in January is ‘further darkening’ the growth outlook.
The ONS data showed household spending bounced back more strongly than expected before Omicron struck, as families ventured out as restrictions eased.