The UK economy recovered back to pre-pandemic levels in November, driven largely by Britain’s dominant service sector activity.
According to the latest data from the Office for National Statistics (ONS), gross domestic product (GDP) grew 0.9% during the month, its sharpest growth since June, and ahead of economists expectations of 0.4%.
This means it was 0.7% above its pre-COVID peak in February 2020, while overall GDP grew by 1.1% in the three months to November.
It comes as other economies have already also recovered their pre-COVID size, including the United States.
UK growth received a 1.4% boost from retail trade in November, as Brits hit the shops early to avoid shortages thanks to supply chain disruptions.
Output increased across all sectors, with services rising 0.7% in total, while production climbed 1%, and construction increased 3.5% amid dry and mild weather and as raw materials became easier to get hold of.
The ONS added that architects, couriers and accountants also had a bumper month.
“It’s amazing to see the size of the economy back to pre-pandemic levels in November – a testament to the grit and determination of the British people,” chancellor Rishi Sunak said, welcoming the news.
“The government is continuing to support the economy, including through grants, loans and tax reliefs for businesses, and our Plan for Jobs is ensuring people up and down the country have fantastic opportunities."
However, the figures cover the period before the spread of the Omicron variant, which may have slowed growth during December as people cancelled bookings across the leisure, hospitality and travel sectors.
January's figures are also likely to have been affected by the strain, with additional challenges such as "shortages of labour – exacerbated by sickness absence – supply chain disruption, and a cost of living crunch for households," the CBI said.
Paul Dales, chief economist at Capital Economics, said: “Output…probably fell back in December and perhaps January too due to the effects of the government’s Plan B restrictions, staff absences due to Omicron isolation/illness and some consumer caution.”
“We’ve pencilled in a 0.5% month-on-month decline in GDP for both December and January.”
But the ONS said unless GDP falls more than 0.2% in December, or there is a revision to the data, the UK economy “will either reach or surpass its pre-coronavirus level” across the fourth quarter as a whole.
Suren Thiru, head of economics at the British Chambers of Commerce, said: “While the UK economy should rebound once Plan B measures are lifted, surging inflation and persistent supply chain disruption may mean that the UK's economic growth prospects remain under pressure for much of 2022.”
James Smith, Research Director at the Resolution Foundation, added: “More timely data show that consumer-facing services like hospitality hit a brick wall in December and January, as families become more cautious in the face of rising cases.
“This, combined with rising inflation and soaring energy bills, means we may need to work back towards this November peak of output in early 2022.”