U.K. Economy Grew More Than Estimated Before Pandemic Struck
The U.K. economy grew more strongly than previously thought in the year prior to the coronavirus pandemic.
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The U.K. economy grew more strongly than previously thought in the year prior to the coronavirus pandemic, data published Monday show.
Gross domestic product expanded 1.7% in 2019 instead of the previously estimated 1.4%, the Office for National Statistics said. That capped a decade that produced 2% average growth a year, a figure that was revised up from 1.8%.
The revisions are part of the annual Blue Book review. This year they include the impact of using double deflation, a method of calculating gross value added that aims to better capture the prices of goods and services used in the production process.
Under double deflation, the current price of both output and inputs in every industry are deflated by separate price indices.
Manufacturing posted stronger growth, and an improved deflator has resulted in higher GVA in the telecommunication services sector, the ONS said. There was also a beneficial impact on productivity, meaning the slowdown seen after the financial crisis was not as steep as previously thought.
“With the economy growing slightly less before the financial crisis and slightly more after, the size of the so-called ‘productivity puzzle’ (where productivity was seen to grow much more slowly in recent years than before 2008) is now around a quarter smaller,” Craig Mclaren, Head of National Accounts, wrote in a blog.
“Much of this improved productivity has come from the telecoms industry, thanks to our improved measurement of price changes in this sector,” he wrote. “However, several areas of manufacturing are now also seeing higher productivity growth, while many services are growing less quickly. “
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