The UK economy has surpassed previous estimates and has rebounded from the Covid-19 pandemic faster than expected, according to new official figures. The Office for National Statistics revealed that the gross domestic product (GDP) in the three months leading up to June was 1.8% above its pre-pandemic level in the final quarter of 2019. Prior to this revision, the UK was the only G7 economy that hadn’t returned to pre-pandemic levels. However, while the UK’s recovery is stronger than Germany’s and on par with France’s, it still lags behind other countries.
The major changes in these figures came from revisions announced at the beginning of September, which added nearly 2% to the size of the UK economy for the period leading up to 2021. The revisions for 2022 and the first two quarters of 2023 were smaller. Chancellor Jeremy Hunt welcomed the data, stating that it proved the doubters wrong and emphasized the importance of sticking to their plan to reduce inflation. However, economists cautioned that the UK’s performance was still relatively poor compared to other leading economies and predicted a mild recession due to rising interest rates.
The revised GDP figures will have an impact on the Office for Budget Responsibility’s forecasts for Chancellor Hunt’s Autumn Statement on November 22. Economists noted that it might take some time for a stable picture to emerge, as statistical authorities in other countries are also revising their data. While household spending and disposable income showed some positive growth in the second quarter of 2023, experts suggested that sluggishness would define the near future for the UK economy. Overall, while the UK’s recovery has surpassed expectations, it still has some ground to cover compared to its global counterparts.