This article from Ambrose Evans-Pritchard dated 11th February sets a more optimistic note when he says that "With the right policy mix, the UK may even be the G7’s fastest growing economy again in 2022"
The UK’s explosive growth of 7.5pc last year is in one sense an illusion, but nevertheless good enough to crack a bottle of Kentish sparkling wine.
The purist methodology of the Office of National Statistics overstated the collapse in GDP during the first year of the pandemic and it has overstated the mechanical rebound on the way back up. France has seen the same distortion.
At the end of the day, the UK is in the middle of the G7 and OECD pack, just shy of its pre-pandemic level of GDP. Omicron shaved a bit off in December but the UK’s wave hit several weeks earlier. Effects will linger into early 2022 in much of the Continent, where ever less justifiable restrictions have persisted despite high rates of vaccination and antibodies.
Even so, the UK has recovered well ahead of Japan, Germany and Spain, and slightly ahead of Italy. France has done better but discretionary fiscal stimulus is enormous - Emmanuel Macron’s critics allege pre-electoral pump-priming (il crame la caisse) - so the comparison lacks relevance.
Canada has again pulled ahead, but so it should as a major commodity exporter in the middle of a global commodity boom. The US has achieved energy independence and is therefore recycling the soaring cost of fossil fuels within its own economy.
True, UK inflation is reaching nosebleed levels - with a 7.25pc peak pencilled in for April - but that is partly because this country is overly-reliant on natural gas for heating and power plants. The Netherlands and Belgium are in the same boat, and their inflation reached 7.5pc and 8.5pc in January respectively on the Eurostat measure.
For the full article in pdf, please click here:
Rishi Sunak - Chancellor of the UK Exchequer