The UK economy grew by 1.8 per cent in the three months to the end of June 2023 compared with the final quarter of 2019 before the Covid-19 pandemic started, according to revised official data released on Friday, Reuters reported.
This represents an upward revision in economic performance from the last Office for National Statistics (ONS) estimate on 11 August. According to the assessment, the economy was still 0.2 per cent smaller than before the pandemic, leaving it at the bottom of the list among the largest advanced economies.
The UK’s relative economic performance after the pandemic and Brexit has been at the centre of political debate, especially in connection with next year’s national elections.
We know that the British economy recovered faster from the pandemic than anyone previously thought and data out today once again proves the doubters wrong.
UK gross domestic product (GDP) growth of 1.8 per cent over the period is higher than the 1.7 per cent growth seen in France and 0.2 per cent in Germany. However, it still lags behind the 6.1 per cent increase seen in the United States and also less than the GDP growth of Japan, Italy or Canada.
Many UK households have been hit hard by the sharp rise in the cost of living, which accelerated with the outbreak of war in Ukraine.
Ruth Gregory, deputy chief UK economist at Capital Economics, said:
“The data … does not change the big picture that the economy has lagged behind all other G7 countries aside from Germany and France since the pandemic. And that’s before the full drag from higher interest rates has been felt.”
The Bank of England raised interest rates 14 times since December 2021 to cope with rising inflation, but last week it unexpectedly left them unchanged at a 15-year high of 5.25 per cent
If the UK economy has been running hotter than we thought, it would help to explain some of the persistence in inflation and the tightness of the labour market.
