UK economy stutters as health sector drives growthon December 10, 2021 at 7:47 am

The UK’s health sector and second-hand car sales helped grow the economy by 0.1% in October, official figures show.

The Office for National Statistics (ONS) said a “dominant” services sector returned to pre-pandemic levels.

However, growth was slower than had been expected, due to reductions in oil extraction and gas use and a drop in people eating out at restaurants.

The economy is still 0.5% below pre-pandemic levels in February 2020, the ONS said.

The GDP figures are “a little bit weaker than expected”, said Liz Martins, UK economist at HSBC, with economists expecting a 0.4% rise in October.

She told the Today programme the “economy was stuttering a little bit even before Omicron emerged”, largely due to supply chain issues and material and product shortages.

“Services did the work, but it’s not necessarily the consumer-facing services – it’s public sector services, like those GP appointments, that’s driving growth,” she added. “So, a little bit of private sector weakness here, no growth in manufacturing, and a fall in construction.”

The ONS said the strong services output was due to the “continued rise” of face-to-face appointments at GP surgeries in England.

Grant Fitzner, ONS chief economist, said while economic growth slowed in October, the “UK health sector again grew strongly while second-hand car sales and employment agencies also boosted the economy”.

However, Mr Fitzner said the construction industry saw its biggest drop since April 2020, with “notable falls in house building and infrastructure work,” partly driven by shortages in raw materials”.

Responding to the figures, Chancellor of the Exchequer, Rishi Sunak said: “We’ve always acknowledged there could be bumps on our road to recovery, but the early actions we have taken, our ongoing £400bn economic support package and our vaccine programme mean we are well placed to keep our economy on track.

“We have still been recovering quicker than expected, with more employees on payrolls than ever before and redundancies remaining low.”