Omicron and decline in trade threaten growth

Britain’s economy heads into the new year weighed down by a decline in trade and falling business and consumer confidence.

- Phillip Inman

Exports were 14% below their 2018 average level in the third quarter of 2021, and there are many economists who doubt sales of UK products abroad will return to 2018 levels until 2024.

UK car manufacturing output declined by more than a quarter in November as Brexit and the after-effects of the Delta variant forced factory owners, struggling with job vacancies and component shortages, to cut production. December, marred as it is by the Omicron variant, is not expected to provide a lift to an industry that exports 80% of what it makes.

The Bank of England, worried about the effect of inflation, became the first major central bank to raise interest rates since the pandemic started when it increased the base rate this month.