O/T:- ⚠️Impressed with the leadership [The UK Party Politics Thread]

[countygump]

This is interesting:




Official statistics on Friday added almost 2 per cent to the size of the UK economy, in a surprise move that showed the country recovered much faster from the pandemic than previously reported.

The Office for National Statistics revisions, which also mean that Britain is no longer the worst performing economy in the G7, will come as a relief to the UK government as it struggles with inflation pressures and a cost of living crisis.

The changes reveal that, by the end of 2021, the country’s economy was 0.6 per cent larger than pre-pandemic levels — instead of 1.2 per cent smaller, as previously estimated.

“The fact that the UK recovered from the pandemic much faster than thought shows that once again those determined to talk down the British economy have been proved wrong,” said Chancellor Jeremy Hunt, adding that the battle against inflation still needed to be won.

In a preview of new national accounts data to be included in official figures from October, the ONS said it had uncovered big sources of growth it had previously not taken account of, particularly as the economy recovered from the pandemic in 2021.

Simon French, chief economist at UK investment bank Panmure Gordon, described the revisions as “extraordinary”, adding: “The entire UK economic narrative — post-pandemic — has just been revised away.”

As recently as mid August, official data reflected ONS estimates that the economy had still not reached its pre-pandemic level, even by the second quarter of this year.

But, after the revisions are included in official figures in October, they will show that the UK economy recovered from the pandemic in late 2021, a recovery as strong as France’s and better than Germany’s.

That will add the equivalent of two years of current UK growth to the country’s gross domestic product.

Some analysts argued that the revisions did not change the big picture of an underperforming UK economy since the Brexit referendum in 2016.

John Springford, deputy director of the Centre for European Reform think-tank, said it was “worth remembering” that the ONS had previously revised 2020 GDP down by 1.7 percentage points in changes last year.

The revisions may also not have a big impact on public finances, since they do not alter official tax receipts or public spending data. However, the Office for Budget Responsibility will need to take the new data into account as it prepares forecasts to accompany the government’s Autumn Statement.


The ONS now says the economic contraction at the height of the Covid crisis in 2020 was not as deep as previously thought.

It found that companies had been adding to piles of unsold stocks rather than running them down, as previously thought.


That accumulation of stock caused a £14bn upward revision to the level of real gross domestic product for 2022. As a result, GDP is estimated to have slumped by 10.4 per cent in 2020 rather than 11 per cent. The fall that year still qualifies as the worst annual contraction since the “great frost” of 1709.

The ONS also discovered that wholesale companies and the health sector produced much more in 2021 than previously thought.

The revision was largely due to higher margins as Covid curbs eased, which boosted income, profits and ultimately GDP.

The ONS update corrects a previous anomaly, in which huge amounts of extra money was being spent in healthcare over the pandemic but measured output did not rise accordingly. This also meant GDP was significantly higher than previously thought.



https://www.ft.com/content/50386cc2-...b-cf3243da810f