The British economy grew at a faster-than-expected pace during Q4 2020 but throughout 2020, the economy suffered the worst contraction in three centuries. Official data also revealed an increase in household savings over the past year, which the Bank of England expects will fuel economic recovery when the lockdown restrictions are lifted.
The UK GDP increased by 1.3% during the last quarter exceeding expectations by 0.3%, however the GDP in 2020 as a whole, fell by 9.8%.
OECD data showed that the British economy suffered the largest decline among all OECD countries except Argentina and Spain. The British economy stands about 7.3% lower than it was before the pandemic in terms of inflation, which is the second largest drop among the eight major economies.
The Bank of England expects the British economy to grow by 5% in 2021, supported by the fastest vaccination program in Europe.
Household savings increased by 16.1% in the last quarter, and in 2020 it recorded an overall increase of 16.3% compared with 6.8% in 2019. Finance Minister Rishi Sunak announced further stimulus earlier this month, increasing the emergency response tally to more than 350 billion.