Economy surged before Omicron struck the UK

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THE UK’s economy was showing signs of leaving the pandemic behind it in November, before the Omicron variant of Covid-19 ripped through the country.

During the month, gross domestic product (GDP) rose by 0.9%.

It was considerably ahead of the 0.4% that had been predicted by analysts, according to an average compiled by Pantheon Macroeconomics.

The surge pushed GDP back above its pre-pandemic levels for the first time, the Office for National Statistics (ONS) said.

The ONS reported that the construction sector grew strongly during November, with the services and production sectors also benefiting. The measure is currently 0.7% ahead of where it was in February 2020.

Chancellor Rishi Sunak said the return to pre-pandemic levels was “a testament to the grit and determination of the British people”.

But the unseasonably mild weather in November also played its part.

The construction sector, which grew at a rapid 3.5%, was able to operate on sites throughout the month due to the dry weather.

Infrastructure businesses saw their output rise 11.4%, while private new housing companies rose 5.5%.

Their strong growth is in part explained by a bounceback from large losses in October, but there is also evidence that supply chain problems eased during the month.

ONS chief economist Grant Fitzner said: “The economy grew strongly in the month before Omicron struck, with architects, retailers, couriers and accountants having a bumper month.

“Construction also recovered from several weak months as many raw materials became easier to get hold of. This meant that monthly GDP exceeded its pre-pandemic level for the first time in November.”

The economic impact of the fight against Covid-19 was also evident in the data.

Output from the vaccination programme increased 40% as boosters were rolled out, which helped contribute 0.2 percentage points to GDP, together with NHS Test and Trace.

In England there were 7.6 million vaccinations in October, and 10.3 million in November.

But the figures do not take into account the weight that Omicron might have put on the economy in the last month and a half.

The first cases of the variant were only discovered in the UK at the end of November, so it is unlikely to have had any impact on the data.

Confederation of British Industry lead economist Alpesh Paleja said: “While it’s good that economic growth picked up in November, the data has been overtaken by events.

“Activity is very likely to have taken a hit in December, as the spread of the Omicron variant and subsequent restrictions disrupted operations in certain sectors.”