Gross domestic product rose 1 per cent from the third quarter, fuelled by a boom in construction and government spending. That averted the risk of a second recession early this year but left a 9.9 per cent contraction for the whole of 2020, the biggest slump since a Great Frost killed crops across Europe.
The figures add weight to the Bank of England’s view that growth is set to surge as Prime Minister Boris Johnson’s campaign to vaccinate the population takes hold. The central bank’s Chief Economist Andy Haldane expects consumers to unleash an estimated $345 billion of savings that households built up while the economy was locked down.
“A year from now, annual growth could be in the double digits,” Haldane wrote Friday in the Daily Mail newspaper.
GDP in the fourth quarter was 7.8 per cent lower than a year earlier, further below pre-pandemic levels than any other Group of Seven economy.
Output grew 1.2 per cent in December alone, recouping some of the loss from the previous month when England was placed in a four-week lockdown.
All the main segments of the economy in the fourth quarter, with construction posting the strongest reading. The outlook for the recovery hinges on the degree of scarring left by the pandemic. Britain's Finance minister Rishi Sunak said the record fall in GDP was in line with other countries when measured on a comparable basis. “I think it's important to clear up this question of our comparative economic performance actually,” he told UK broadcasters.