Britain‘s economy grew strongly in November to finally surpass its size just before the country went into its first COVID-19 lockdown, official data showed on Friday.
The world’s fifth-biggest economy expanded by a much faster than expected 0.9% in November – before the latest wave of COVID-19 infections and restrictions for many firms – leaving it 0.7% bigger than it was in February 2020, the ONS said.
Economists polled by Reuters had forecast monthly gross domestic product growth of 0.4% for November.
“It’s amazing to see the size of the economy back to pre-pandemic levels in November – a testament to the grit and determination of the British people,” finance minister Rishi Sunak said.
Other economies have already recovered their pre-COVID size, chief among them the United States.
Britain’s economy shrank by more than 9% in 2020, one of the biggest pandemic slumps among the world’s rich nations.
Despite November’s growth acceleration, GDP probably took a fresh hit in December when the Omicron coronavirus variant swept Europe, and the loss of momentum is likely to have stretched into January with many firms reporting severe staff absences and consumers still wary of going out.
On Thursday, data showed record levels of staff absence due to COVID-19 around the turn of the year.
But health officials think the Omicron infections wave has now peaked in Britain and analysts say the blow to the economy is likely to be short-lived, allowing the Bank of England to continue raising interest rates this year.
The ONS said, data revisions aside, GDP in quarterly terms would reach or surpass its pre-coronavirus level in the October-December period of 2021, as long as economic output does not fall by more than 0.2% in December.
The BoE’s current forecasts show GDP returning to its size at the end of 2019 in the first quarter of 2022.
EARLY CHRISTMAS SHOPPERS, MASS JABS
The ONS said retailers had a strong November – when many consumers bought Christmas presents earlier than usual – while architects, couriers and accountants also had a bumper month.
Construction recovered from several weak months as raw materials became easier to source after problems in global supply chains.
The country’s rush to give booster vaccinations against COVID-19 and its test-and-trace programme provided extra momentum to the GDP figures.
Britain’s economy will still face challenges in the months ahead, even once coronavirus restrictions known as “plan B” are relaxed.
Consumers are facing an inflation rate that is expected to reach a 30-year high of 6% or more in April – when energy tariffs will leap by an estimated 50% – and an increase in social security contributions also starting that month.
“While the UK economy should rebound once Plan B measures are lifted, surging inflation and persistent supply chain disruption may mean that the UK’s economic growth prospects remain under pressure for much of 2022,” Suren Thiru, head of economics at the British Chambers of Commerce, said.
Sterling edged up against the U.S. dollar and the euro after the GDP data.
Separately, the ONS released trade data showing that Britain’s goods trade deficit narrowed slightly to 11.3 billion pounds in November from 11.8 billion pounds in October.
Imports from non-European Union countries were higher than from EU countries for the 11th consecutive month, and the gap was at its widest point of the year, the ONS said.
Britain’s trading relationship with the EU has been hit by the introduction of new post-Brexit rules after the country left the bloc’s single market at the start of 2021.
(Writing by William Schomberg and Alistair Smout; Editing by Guy Faulconbridge, Toby Chopra, Peter Graff)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
