(Bloomberg) -- The UK economy weathered the impact of double-digit inflation and political turmoil better than initially thought in 2022, according to updated figures showing a faster increase in output.
Gross domestic product jumped 4.8% in 2022, instead of the 4.3% previously estimated, the Office for National Statistics said Wednesday in its annual revisions of historical data stretching back to 1997. Expansion was revised higher for every calendar quarter.
The stronger growth for the year was largely a spillover from the UK’s post-pandemic recovery, with parts of 2021 still affected by lockdown.
The data suggest the economy was showing latent resilience even as it began to be impacted by Russia’s invasion of Ukraine, which sent inflation in Britain rocketing to a peak of 11.1% in October 2022.
Britain also faced political turmoil during Liz Truss’s short-lived premiership after her market-rattling mini-Budget. The prior data for the third quarter had pointed to a contraction then, but the revisions now show that the economy was only in a slowdown, still growing 0.1%.
The impact of the cost-of-living crisis later triggered a recession and slowed annual GDP growth to just 0.1% in 2023. However, the economy has bounced back more quickly than many forecasters had expected this year as the surge in inflation fades.
The ONS also revealed small revisions for growth in previous years, when the economy was suffering the effects of the pandemic. The GDP slump in 2020 was slightly smaller than first thought, at 10.3% rather than 10.4%. The bounce back in 2021 was marginally slower, with a 8.6% jump in output rather than 8.7%.
The revisions have only limited implications for Chancellor Rachel Reeves’s budget plans, as they don’t impact more recent borrowing figures. The Bank of England has also previously played down the significance of historic estimates for its fight to contain inflation.
Previous such releases have featured larger revisions due to the huge swings in output seen in the pandemic.
Craig McLaren, head of national accounts at the ONS, attributed the latest changes to the need to tweak the weight that statisticians give to each part of the economy.
This “has had a notable impact on our estimates, given the significant changes to how our economy has operated due to both the pandemic and impact of Russia’s invasion of Ukraine,” he wrote in a blog post.
The share of mining and quarrying in the economy increased due to the surge in oil and gas prices in the wake of the war outbreak. Healthcare also remains larger than it was before the pandemic.
For 2022, growth in the transport, professional and business support services industries was revised higher, partially offset by lower readings for manufacturing and healthcare.
(Updates with further data starting in seventh paragraph)
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