The UK economy grew more than previously thought in the last six months of last year, according to official statistics that also confirm output suffered the biggest drop in more than 300 years in 2020.
UK output expanded 1.3 per cent in the final three months of 2020 compared with the previous three months, an upward revision from 1 per cent, data from the Office for National Statistics showed on Wednesday.
Growth in the third quarter was revised up to 16.9 per cent, 0.8 per cent stronger than previously estimated, while output in the second quarter was calculated to have fallen 0.5 per cent more than previously thought at 19.5 per cent.
“Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year,” said Jonathan Athow, ONS’s deputy national statistician for economic statistics.
With the revisions, the UK economy was estimated to have contracted 9.8 per cent in 2020, only marginally better than the 9.9 per cent of the initial estimates. This is still the largest contraction in more than 300 years, according to GDP reconstruction by the Bank of England.
The detailed GDP figures revealed that the household saving ratio — the average percentage of disposable income that is saved — rose to 16.1 per cent in the final quarter. This is up from the 14.3 per cent in the previous three months and one of the highest ratio since records began in 1963.
A high household saving ratio, which reflects limited spending opportunity due to restrictions, fuels hopes that the extra money will help to boost the economic rebound as businesses reopen.