UK economy grows by 1.3% in better-than-expected rise after Spring Statement

Chancellor of the Exchequer Rishi Sunak answering questions about the Spring Statement at the Treasury Committee in the House of Commons, London. Picture date: Monday March 28, 2022.
Chancellor of the Exchequer Rishi Sunak answering questions about the Spring Statement at the Treasury Committee in the House of Commons, London. Picture date: Monday March 28, 2022.

The news comes after Chancellor Rishi Sunak unveiled a bleak outlook for the UK economy in last week's Spring Statement

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The UK economy grew at a faster pace than first thought between October and December 2021, at 1.3 percent compared with the initial estimate of one percent, the Office for National Statistics has said.

It marked a bounceback on downwardly revised growth of 0.9 percent in the third quarter of last year.

In a sign of the impact of rising prices, household savings fell to their lowest since the start of the pandemic, with the ratio at 6.8 percent in the fourth quarter.

The ONS said gross domestic product (GDP) is now 0.1 percent below where it was before the pandemic.

But revisions to GDP figures for the past two years means the economy increased by 7.4 percent in 2021 – still a record rebound, but lower than the 7.5 percent initial estimate.

The ONS said this comes after it revised the record-breaking GDP drop at the height of the pandemic in 2020 to 9.3 percent, against the 9.4 percent first estimate.

Darren Morgan, director of economic statistics at the ONS, said: “GDP grew a little stronger than we first thought in the fourth quarter, meaning it is now only 0.1 percent below its pre-pandemic level.

“Savings were at their lowest level since the start of the pandemic as household spending rose, mainly driven by rising prices.

“The underlying current account deficit halved, as UK-based businesses earned more income from abroad than foreign-based companies earned in the UK for the first time in a decade.”