UK Economy Grows Slower Than Initially Anticipated in Q3 Before Omicron Emerged

Britain’s economy expanded slower than initially estimated in July-Sept. period before the Omicron variant of the COVID-19 posed a further threat to the recovery later in the year.

Source: Office for National Statistics

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Gross domestic product in the fifth-biggest economy worldwide grew only by 1.1% in Q3, weaker than the earlier estimated growth of 1.3% as global supply chain constraints hampered production.

That was slower than the economy’s 5.4% rebound in Q2 when many COVID-19 restrictions were removed.

Investors are bracing for a further slowdown in Q4 of 2021 and a weak start to 2022 after an increase in COVID-19 cases caused by Omicron that hurt Britain’s hospitality and leisure sector.

The ONS stated that households slid into their lockdown savings to fund their spending. The savings ratio dropped to 8.6% of disposable income, down from nearly 11% in Q2.

The plunge in Britain’s economy last year was now projected at 9.4%, revised from a 9.7% fall, and the ONS projected GDP in September was 1.5% below where it was at the close of 2019.