UK economy larger than thought, updated 2023 GDP figures confirm, with Q1 revised upwards

The UK’s economy is larger than first thought, the ONS confirmed today, as revised figures show the rate of growth in GDP this year was largely unchanged from past estimates (AFP via Getty Images)
The UK’s economy is larger than first thought, the ONS confirmed today, as revised figures show the rate of growth in GDP this year was largely unchanged from past estimates (AFP via Getty Images)

The UK’s economy is larger than first thought, revised figures from the ONS confirmed today.

The UK’s GDP figures for 2020 and 2021 were dramatically revised upwards, showing a much better recovery from the pandemic than previously thought, at the start of the month. However, those figures did not cover 2022 or 2023.

Now, the new figures show the speed of growth in the UK economy in the 18 months to the end of June has been “broadly unchanged” from the initial figures. The rate of growth for the second quarter of this year remained at 0.2 per cent, but in the first quarter growth was revised up slightly from 0.1 per cent to 0.3 per cent.

But, combined with the better-than-thought pandemic rebound, the figures confirm that the UK’s economy now is larger than in earlier assumptions by around 2%, or £50 billion.

They also show some differences in which sectors of the economy are performing well, with science firms growing faster than first thought.

ONS Chief Economist Grant Fitzner said: “Our new estimates indicate a stronger performance for professional and scientific businesses due to improved data sources. Meanwhile, healthcare grew less because of new near real-time information showing the cost of delivering services.”

The revisions are due to better data around taxes and costs, which the ONS said “can take a while to collect”.

The UK was the first country to revise its pandemic-era GDP figures as better data became available, but many international peers such as Spain, the Netherlands and Italy have done the same.

The revised 2020 and 2021 figures meant it was no longer the case that the UK had the slowest recovery from the pandemic among major economies.

RUth Gregory, deputy chief UK economist at Capital Economics, was not optimistic about what the change meant: “Overall, today’s release changes very little. The data leaves the economy still only 0.6 per cent above its level a year ago.

“It does not change the big picture that the economy has lagged behind all other G7 countries aside from Germany and France since the pandemic. And that’s before the full drag from higher interest rates has been felt.”