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UK economy expands 7.5% in 2021 after a 9.4% contraction in 2020

Britain's Prime Minister Boris Johnson

The UK economy expanded 7.5 per cent in 2021 after contracting 9.4 per cent in 2020. This is the fastest expansion for the UK since World War II. Though with this growth rate, the UK is now the world’s fastest growing advanced economy, challenges remain.

The economy’s size in actual terms is still smaller than what it was at the end of 2019, before the outbreak of the pandemic.

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The Guardian said that activity in the final three months of 2021 was 0.4 per cent lower than in the final three months of 2019 – the period immediately before the pandemic struck.

Data portal Trading Economics indicated that household consumption increased 1.2 per cent, government spending 1.9 per cent, gross fixed capital formation 2.2 per cent and exports jumped 4.9 per cent. Imports dropped 1.5 per cent.

The newspaper said that statistically, 2022 was expected to be another strong year. “Again, it would be wise not to get too carried away because most forecasters expect the economy to slow markedly in the second half of the year as higher taxes, rising energy bills, increased borrowing costs and a squeeze on incomes combine to hit spending power,” it added.