Home Economy A weakened UK economy emerges from the Covid mist

A weakened UK economy emerges from the Covid mist

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Here is a simple question. Has the UK economy already recovered all of the ground lost during coronavirus, or is the damage wrought by Covid-19 so severe that it will take another two years of normal growth rates to return activity to its pre-pandemic level?

It may come as a surprise that the official answer, according to the UK’s Office for National Statistics, is that both statements are true. Measured by the value of goods and services produced, the real level of UK output was only 0.6 per cent below the pre-pandemic level in September and, by now, will almost certainly have reached that benchmark. But on another official statistic, the shortfall is still 3.3 per cent, roughly the equivalent of two years of recent UK average growth rates.

For most people, this is the moment when you throw your arms up into the air and scream that economics never gives a straightforward answer. Policymakers, such as those at the Bank of England, tend to dust…

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