Skip to content 
Search

Latest Stories

UK economy grew more slowly than thought before Omicron hit

UK economy grew more slowly than thought before Omicron hit

BRITAIN'S economy grew more slowly than previously thought in the July-September period, before the Omicron variant of the coronavirus posed a further threat to the recovery later in the year, official data showed on Wednesday (22).

Gross domestic product in the world's fifth-biggest economy increased by 1.1 per cent in the third quarter, weaker than a preliminary estimate of growth of 1.3 per cent as global supply chain problems weighed on manufacturers and building firms.

That was slower than the economy's 5.4 per cent bounce-back in the second quarter when many coronavirus restrictions were lifted, the Office for National Statistics said.

Investors are braced for a further slowdown in the fourth quarter of 2021 and a weak start to 2022 due to a rise in Covid cases caused by Omicron which has hurt Britain's hospitality and leisure sector and hit retailers.


EXCLUSIVE: As Omicron surge continues doctors’ leaders warn…NHS ON BRINK OF COLLAPSE


Prime minister Boris Johnson has ruled out new Covid restrictions in England before Christmas but said he might have to act afterwards. Scotland and Wales have tightened controls.

"Although the economy has got better at coping with restrictions with each new wave, the possibility of tighter restrictions in January is further darkening the outlook for GDP," Bethany Beckett, an economist with consultancy Capital Economics, said.

The ONS said households dipped into their lockdown savings to finance their spending. The savings ratio fell to 8.6 per cent of disposable income, down from almost 11 per cent in the second quarter.

Weakness in the health sector, where test and trace work and vaccinations tailed off, and among hairdressers were partly behind the cut to the third-quarter growth estimate.

A fall in energy output, after a surge in demand during a cold spring in the second quarter, also weighed.

"However, stronger data for 2020 means the economy was closer to pre-pandemic levels in the third quarter," ONS Director of Economic Statistics Darren Morgan said.

The slump in Britain's economy last year was now estimated at 9.4 per cent, revised from a 9.7 per cent crash, and the ONS believed GDP in September was 1.5 per cent below where it was at the end of 2019, revised up from the previous estimate of 2.1 per cent.

However, Britain's progress towards regaining its pre-pandemic economic size, in inflation-adjusted terms, remained behind that of most other big rich economies such as France, Germany and the United States, the ONS said.

Business investment fell by 2.5 per cent in the third quarter from the previous three months and was nearly 12 per cent below its pre-pandemic level.

The Bank of England is hoping for a revival of business investment to help improve Britain's longer-term growth prospects.

Britain's balance of payments deficit widened to 24.4 billion pounds ($32.35 billion) as goods exports fell, goods imports grew and foreign companies received more income from their investments in the United Kingdom.

Economists polled by Reuters had expected a smaller deficit of 15.6 billion pounds.

As a share of GDP, the shortfall almost doubled to 4.2 per cent from 2.3 per cent in the second quarter.

(Reuters)

More For You

Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
modi-trump-getty
Modi shakes hands with Trump before a meeting at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Indian exporters watch closely as Trump says trade deal with India likely

THE US could reach a trade deal with India that would help American companies compete more easily in the Indian market and reduce tariff rates, President Donald Trump said on Tuesday. However, he cast doubt on a similar deal with Japan.

Speaking to reporters on Air Force One, Trump said he believed India was ready to lower trade barriers, potentially paving the way for an agreement that would avoid the 26 per cent tariff rate he had announced on April 2 and paused until July 9.

Keep ReadingShow less
Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Key issues in India, US trade talks

TRADE talks between India and the US have hit a roadblock over disagreements on duties for auto components, steel and farm goods, Indian government sources said to Reuters, dashing hopes of reaching an interim deal ahead of president Donald Trump's July 9 deadline to impose reciprocal tariffs.

Here are the key issues at play:

Keep ReadingShow less