As with all things COVID, it is always compared to the second world war. The damage to the economy, the “Blitz” spirit, all aimed to be replicated in our war on the virus. The BBC now says our growth rebound has been the fastest since the second world war.
According to the Office for National Statistics (ONS), Britain’s economy has had a growth rate of 7.5%, the fastest in the G7. This certainly bodes well for Prime Minister Johnson’s global Britain agenda, able to boast a recovering economy, and perhaps a model to his foreign counterparts. This came in spite of the slight economic contractions alongside the birth of Omicron.
However, a growing cost of living crisis may help to slow down this growth. As prices rise, customers are unable to invest more in the economy. High levels of inflation and fears of rising interest rates have made people's willingness to purchase and their purchasing power decline. These, along with shockingly high fuel prices (has anybody else heard the phrase, “it’s the petrol or my mortgage,” lately) which, amongst other things have made people much scarcer for the cash they would now be putting into the economy.
Despite these issues, the recovery is seemingly going well. This could be due to the United Kingdom’s vaccine rollout programme, giving UK citizens more confidence to return to work and shops, investing in the economy. This has been helped due to how the past years in lockdown helped people to save more than they ever have done before. The ONS director of economic statistics Darren Morgan has described the UK economy’s position as “pretty healthy” given the Omicron issue.
However, he did say that this is compared to the position where we were during COVID. Compared to pre-pandemic levels, the UK recovery is actually fairly mid-range amongst the G7 nations. Just because the growth is high, starting from a lower level means the UK remains behind competitors overall.
The economic collapse in 2020 was a dramatic 9.4%, far more significant than many global competitors. The US, Canadian and French economies all fell less than the British economy. This 9.4% slump was the most significant since World War I, terrible damnation.
Whilst growth is a good sign and should be reassuring, it would be easy to come under the illusion we are doing better than everyone else. This is not the case, and should not distract the government from the very real dilemmas they now face in a changed economic world
Written by Adam Caudle