The UK economy shrank less than expected in December as activity to combat the Omicron variant helped offset the virus’s impact on services, official figures showed.
Output fell 0.2% from November to December in the largest contraction since January 2021, the Office for National Statistics said. The drop was smaller than the 0.6% average decline forecast by economists in a Reuters poll.
Services output fell 0.5%, driven by a 3.2% drop in wholesale and retail trade, where footfall was affected by the spread of the Omicron variant. Accommodation and food services output dropped 9.2% as people cancelled trips and stayed away from pubs and restaurants.
The effect of Covid-19 on services was partly offset by growth in coronavirus testing and vaccinations, which together added 0.7 percentage point to gross domestic product.
“GDP fell back slightly in December as the Omicron wave hit with retail and hospitality seeing the biggest impacts,” Darren Morgan, the ONS’s director of economic statistics, said. “However, these were partially offset by increases in the test and trace service and vaccination programmes.”