UK economy grew more slowly than expected before Omicron hit
The UK economy grew at a slower pace than first thought between July and September, at 1.1% compared with the 1.3% initial estimate, official figures show.
Net trade weighed on growth, the Office for National Statistics figures show, as exports fell during the period and imports rose. The UK’s trade balance fell to a deficit of -1.9% of GDP in the third quarter, revised down from the first estimate of -1.2%.
However, household consumption during the quarter rose by 2.7%, more than originally estimated and making the largest contribution to expenditure, as the economy reopened from Covid restrictions during the summer months, after indoor hospitality was reopened in England, Scotland and Wales.
The period in question came before the spread of the Omicron variant prompted the government to introduce Covid plan B measures, leading to a steep decline in trade in parts of the economy, including the hospitality sector, as consumers cancelled bookings and decided to stay at home.
Darren Morgan, the director of economic statistics development at the ONS, said: “Our revised figures show UK GDP recovered a little slower in the third quarter, with much weaker performances from health and hairdressers across the quarter, and the energy sector contracting more in September, than we previously estimated. However, stronger data for 2020 means the economy was closer to pre-pandemic levels in the third quarter.”
The export of goods fell in the third quarter by 8.8% as fewer products including machinery and transport equipment were sent overseas. This was only slightly partly offset by a rise in service exports of 2.7%, driven by financial services.
In contrast, total imports to the UK rose by 1.1%, more than previously estimated, as a result of an increase in the import of fuels, goods and chemicals.