Britain's economy rebounded by 7.5 per cent in 2021, its strongest year of growth since the Second World War, after pandemic restrictions were eased across the country, official figures have shown.
The growth in gross domestic product, which exceeded projections by the Bank of England, came despite a 0.2 per cent contraction in the economy in December after the outbreak of Omicron led to tougher restrictions being imposed, the Office for National Statistics said.
Chancellor of the Exchequer, Rishi Sunak, said the government's £400 billion ($542.44bn) package of coronavirus support helped the economy to remain "remarkably resilient" in 2021 "with the UK seeing the fastest growth in the G7 last year and GDP remaining at pre-pandemic levels in December".
“I’m proud of the resolve the whole country has demonstrated and proud of our incredible vaccine programme which has allowed the economy to stay open," he said.
The strong growth in 2021 was in stark contrast to the 9.4 per cent contraction in output in 2020 – the biggest drop since 1919 when there was demobilisation after the First World War – when the pandemic and the resulting lockdown hammered the economy.
However, the UK has enjoyed a stronger recovery than its peers, aided by billions of pounds of government aid to support jobs and firms through the crisis, and its economy still managed to grow by 1 per cent in the last three months of the year.
"When you compare the UK’s performance to other G7 countries over the last year it stands head and shoulders above the rest of the pack. By the final quarter the UK had lost ground as Spain, the US and Canada rocketed forward but Omicron is likely to have played a big part in that story," said Danni Hewson, a financial analyst at AJ Bell.
"Longer term, the UK’s biggest challenge still seems to be productivity growth, which has been lacklustre for over a decade. Until that is fixed the UK economy is likely to have a pretty humdrum underlying pace of growth.”
The 0.2 per cent decline in December came as the hospitality and leisure sector bore the brunt of Omicron and related government restrictions. While the contraction was less than expected, it left the overall size of the economy standing exactly where it was in February 2020, shortly before the pandemic broke out.
Combine December's inflation rate of 5.4 per cent with the 0.2 per decline in GDP in December and it means the economy "experienced a taste of stagflation at the end of last year", said Paul Dales, chief UK economist.
"As it was driven by the Omicron Covid-19 wave which has now faded, the fall in GDP will soon be reversed. But high inflation will be with us for longer and, together with the rise in taxes in April, will restrain GDP growth this year," he added.
Covid-19 infections in Britain peaked around the turn of the year but have since fallen sharply, and the Bank of England forecast last week that it expects the economy to stagnate in the first quarter but rebound strongly in the following three months to return to its pre-Covid size.
The latest GDP figures will be welcomed by Prime Minister Boris Johnson, who is grappling with a brutal cost of living crisis and facing calls to resign over alleged rule-breaking parties when the country was in lockdown. They will also keep the Bank of England focused on efforts to curb surging inflation, which they expect to hit 7.25 per cent in April, with more interest-rate increases likely.
However, the squeeze on household incomes from rising prices and planned tax rises could see economic activity “disappoint over the coming months", said Yael Selfin, chief economist at KPMG UK, who forecasts GDP growth this year of 3.7 per cent.
“The reality is the way the government runs our economy is trapping us in a high tax, low growth cycle,” said Pat McFadden, who speaks on Treasury issues for the opposition Labour Party.
“The latest Bank of England forecast suggests that growth will slow to a crawl next year. That would be the slowest growth of any G7 economy.”
The bank has increased rates at it two previous meetings, taking the benchmark to 0.5 per cent this month, and markets are pricing in a rapid series of further moves this year.
Meanwhile, the trade in goods deficit, excluding precious metals, narrowed marginally in the fourth quarter, with exports growing slightly faster than imports. In December, imports from non-EU countries remained higher than from EU countries for the 12th consecutive month.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
SPEC%20SHEET%3A%20APPLE%20IPHONE%2015%20PRO%20MAX
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Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
LIKELY TEAMS
South Africa
Faf du Plessis (captain), Dean Elgar, Aiden Markram, Hashim Amla, AB de Villiers, Quinton de Kock (wkt), Vernon Philander, Keshav Maharaj, Kagiso Rabada, Morne Morkel, Lungi Ngidi.
India (from)
Virat Kohli (captain), Murali Vijay, Lokesh Rahul, Cheteshwar Pujara, Rohit Sharma, Ajinkya Rahane, Hardik Pandya, Dinesh Karthik (wkt), Ravichandran Ashwin, Bhuvneshwar Kumar, Ishant Sharma, Mohammad Shami, Jasprit Bumrah.
Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
Apple product price list
iPad Pro
11" - $799 (64GB)
12.9" - $999 (64GB)
MacBook Air
$1,199
Mac Mini
$799
Company%C2%A0profile
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More from Neighbourhood Watch:
BRIEF SCORES
England 228-7, 50 overs
N Sciver 51; J Goswami 3-23
India 219, 48.4 overs
P Raut 86, H Kaur 51; A Shrubsole 6-46
England won by nine runs
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The End of Loneliness
Benedict Wells
Translated from the German by Charlotte Collins
Sceptre
LIVERPOOL%20TOP%20SCORERS
%3Cp%3E(Premier%20League%20only)%3Cbr%3EMohamed%20Salah%20129%3Cbr%3ERobbie%20Fowler%20128%3Cbr%3ESteven%20Gerrard%20120%3Cbr%3EMichael%20Owen%20118%3Cbr%3ESadio%20Mane%2090%3Cbr%3E%3C%2Fp%3E%0A
KILLING OF QASSEM SULEIMANI
The Bio
Favourite holiday destination: Either Kazakhstan or Montenegro. I’ve been involved in events in both countries and they are just stunning.
Favourite book: I am a huge of Robin Cook’s medical thrillers, which I suppose is quite apt right now. My mother introduced me to them back home in New Zealand.
Favourite film or television programme: Forrest Gump is my favourite film, that’s never been up for debate. I love watching repeats of Mash as well.
Inspiration: My late father moulded me into the man I am today. I would also say disappointment and sadness are great motivators. There are times when events have brought me to my knees but it has also made me determined not to let them get the better of me.
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
Brief scores:
Toss: Sindhis, elected to field first
Kerala Knights 103-7 (10 ov)
Parnell 59 not out; Tambe 5-15
Sindhis 104-1 (7.4 ov)
Watson 50 not out, Devcich 49
How tumultuous protests grew
- A fuel tax protest by French drivers appealed to wider anti-government sentiment
- Unlike previous French demonstrations there was no trade union or organised movement involved
- Demonstrators responded to online petitions and flooded squares to block traffic
- At its height there were almost 300,000 on the streets in support
- Named after the high visibility jackets that drivers must keep in cars
- Clashes soon turned violent as thousands fought with police at cordons
- An estimated two dozen people lost eyes and many others were admitted to hospital
The specs
Engine: 2.0-litre 4-cyl, 48V hybrid
Transmission: eight-speed automatic
Power: 325bhp
Torque: 450Nm
Price: Dh359,000
On sale: now
Read more from Johann Chacko
Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
