The UK’s surge in growth in November has sadly been overtaken by the Omicron variant, cautions Alpesh Paleja, CBI lead economist.
Supply chain issues, and the price of dwelling disaster, are additionally weighing on growth, Paleja explains:
“While it’s good that financial growth picked up in November, the info has been overtaken by occasions. Activity could be very possible to have taken a success in December, because the unfold of the Omicron variant and subsequent restrictions disrupted operations in sure sectors.
“As we kick off the brand new year, the near-term outlook can also be clouded by further challenges: shortages of labour – exacerbated by illness absence, provide chain disruption and a value of dwelling crunch for households.
“Implementing Plan B in December was the right thing to do, but with Covid clearly here to stay, the Government must now act to prevent the need for further restrictions on activity. This includes providing clearer forward guidance to support business adaptation, prioritising mass-testing over mass self-isolation, and ensuring that travel controls are proportionate so that the UK remains open to the rest of the world.”
Chancellor of the Exchequer, Rishi Sunak, has welcomed the information that Britain’s economy is bigger than earlier than the pandemic:
“It’s superb to see the scale of the economy again to pre-pandemic levels in November – a testomony to the grit and willpower of the British folks.
“The authorities is continuous to help the economy, together with via grants, loans and tax reliefs for companies, and our Plan for Jobs is making certain folks up and down the nation have incredible alternatives.
“We all have a vital part to play to protect lives and jobs, and I urge everyone to do theirs by getting boosted as soon as you can.”
Introduction: UK economy recovers to pre-Covid-19 levels
The UK economy has recovered to its pre-pandemic degree, after a surge of growth in November.
UK GDP grew by 0.9% in November, knowledge from the Office for National Statistics reveals, because the economy picked up after slowing to simply 0.2% in October.
It means UK GDP is 0.7% above its degree in February 2020, simply earlier than the primary wave of Covid-19 pandemic hit – a milestone in the recovery from the pandemic.
However, this recovery got here simply earlier than the Omicron variant hit the UK, inflicting disruption in December.
The ONS experiences that the companies, manufacturing, and constructing sectors all expanded in November, whereas the retail sector noticed robust growth.
- Services (0.7%), manufacturing (1.0%) and development (3.5%) output all elevated between October and November 2021; which means that companies and development output are each 1.3% above their pre-coronavirus levels whereas manufacturing stays 2.6% beneath.
- In the newest month, output in consumer-facing companies grew by 0.8%, primarily due to a 1.4% enhance in retail commerce, whereas all different companies rose by 0.6%; consumer-facing companies are nonetheless 5.0% beneath their pre-coronavirus levels, whereas all different companies are 2.9% above.
We’ll pull collectively extra particulars and response now.
Also developing as we speak
China has posted a report commerce surplus in December and in 2021, with exports rising 20.9% year-on-year final month and imports up 19.5%.
Trade knowledge from the UK and the eurozone as we speak will present how Covid, and Brexit, weighed on buying and selling in November.
New US retail gross sales and client confidence knowledge will spotlight if Omicron has harm the American economy.
European stock markets are set for a decrease begin, after one other day of uneven buying and selling on Wall Street. The tech-focused Nasdaq index tumbled 2.5%, to its lowest degree since October.
On the company facet, Blackrock, Citi, JP Morgan and Wells Fargo are releasing This fall monetary outcomes.
- 9am GMT: Germany’s full year GDP report
- 10am GMT: Eurozone commerce stability for November
- 1.30pm GMT: US retail gross sales for December
- 2.15pm GMT: US industrial manufacturing for December
- 3pm GMT: Michigan survey of US client sentiment in January