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PwC comments on ONS January 2022 GDP figures

11 Mar 2022

Barret Kupelian, senior economist at PwC, says

“Today’s ONS data release for the first month of the year showed that the UK economy was firing across all cylinders with the services, production and construction sectors all recording month-on-month growth. Overall economic activity expanded by 0.8% month-on-month as the pace of vaccinations accelerated and clinical data helped subside fears about the Omicron variant.

“The data showed there still is some fuel in the tank for a post-COVID bounce as the output for significant sectors of the economy including manufacturing, arts, entertainment and recreation and financial services continues to remain below pre-crisis levels. Assuming no supply-side constraints, the potential boost to GDP from recovery of these sectors could be in the region of around 1.4 percentage points (see chart).

“Going forward, the key question is the extent to which the UK economy will slow down due to the impending tax increases, the lifting of the energy price cap and higher fuel prices. On the production side, around one third of the UK economy, including agriculture, manufacturing and construction, is more energy intensive than the national average. But the biggest impact is expected to be felt by households, who could be facing the biggest hit to real disposable income for decades.” 

Contributions to pre-crisis growth in UK GDP, January 2022
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