UK economy rebounded by 7.5% last year despite December Omicron threat

The UK economy grew by 7.5% last year after the easing of pandemic restrictions, according to official figures.

The growth, which exceeded projections by the Bank of England, nevertheless followed a 9.4% slump in the economy in 2020 as lockdown ruled were imposed.

New data from the Office for National Statistics (ONS) also showed that gross domestic product (GDP) grew by 1% in the final three months of the year, despite the impact of the spread of the Omicron variant of Covid-19.

The retail and hospitality sectors were the biggest casualties in December.

The economy grew by 1% in the final three months of the year, despite the impact of the spread of the Omicron (Bloomberg via Getty Images)

However, the economy remained at pre-pandemic levels from February 2020.

ONS director of economic statistics Darren Morgan said: "GDP fell back slightly in December as the Omicron wave hit, with retail and hospitality seeing the biggest impacts.

"However, these were partially offset by increases in the Test and Trace service and vaccination programmes.

"Despite December's setback, GDP grew robustly across the fourth quarter as a whole, with the NHS, couriers and employment agencies all helping to support the economy.

"Overall, GDP in December was in line with its level in February 2020, before Covid-19 struck, while in the fourth quarter as a whole, it was slightly below that of quarter four in 2019."

Chancellor of the Exchequer, Rishi Sunak said he is "proud" of the UK's recovery.That's despite households facing the tightest squeeze in a generation from April when the energy price cap uplift of almost £700 takes effect.

A global supply chain crisis is also pushing up the prices of goods, sending inflation to a 30-year high.

Mr Sunak said: “Thanks to our £400bn package of support and making the right calls at the right time, the economy has been remarkably resilient; with the UK seeing the fastest growth in the G7 last year and GDP remaining at pre-pandemic levels in December.

"I’m proud of the resolve the whole country has demonstrated, and proud of our incredible vaccine programme which has allowed the economy to stay open.

“We’re continuing to help the economy rebuild through our Plan for Jobs, boost for business investment and support for households with the cost of living.”