UK GDP grew 7.5 per cent throughout 2021, recording the fastest growth in 81 years.
Pound sterling showed mixed performance in today's European session trading (11/February). The UK Gross Domestic Product (GDP) report has strengthened the pound versus the euro and the Japanese yen. However, GBP/USD holds within the consolidating range between 1.3500-1.3600. UK GDP data this time seems to fail to support market expectations of excessive BoE interest rate hikes.
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| GBP/USD Daily chart via TradingView |
UK GDP grew 7.5 per cent throughout 2021, recording the fastest growth in 81 years. GDP in the fourth quarter of 2021 increased 1.0 percent on a Quarter-over-Quarter basis and 6.5 percent on a Year-on-Year basis. However, the analysts responded coldly.
Charles Hepworth, investment director at GAM Investments, said, “The UK economy grew at its fastest pace in 81 years during 2021, growing 7.5% for the full year. But before we get any relief, let's not forget that 2020 saw a record 9.4% contraction (the worst since 1921), so the (UK) economy is still below pre-pandemic levels and unlike some other G7 members (which have recovered to pre-pandemic levels -ed)."
“The Omicron variance had an impact on output in December, as expected, with consumers dominating (economic) activity and this will no doubt affect the January (GDP) figures as well. As the cost of living rises due to the crisis, it does not signal a bright outlook – this year UK economic growth is sure to slow to sub-optimal levels post-Brexit," added Hepworth.
Barret Kupelian, senior economist at PwC UK, agrees. According to him, UK growth tends to be disappointing compared to other G7 countries. Over the same time period, the economies of the United States and France have grown even higher than their pre-pandemic levels.
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