This morning’s update from the Office for National Statistics has boosted optimism about the prospect of the UK’s economic recovery. GDP fell 2.6 per cent in November last year, reversing the trend of six consecutive months of increases since April’s significant contraction. This takes GDP back down to 8.5 per cent below last February’s levels — wiping out the recovery gains made between roughly the end of July and November.
Not, on the surface, good news — but there is a case for optimism. Cast your mind back to the economic conditions in November: England’s second lockdown had just been announced and there was a host of fire-breakers and circuit-breaks throughout the UK. November’s significantly smaller contraction compared to the March shutdown has forecasters thinking that the economy may have become more resilient to lockdowns.
Capital Economics reports that the economy’s growing ‘immunity’ to restrictions makes the ‘economic hole’ smaller than anticipated, and suggests that ‘the economy may get back to its pre-crisis crisis level a bit sooner’ than previously predicted.
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