UK gross domestic product has risen above its pre-pandemic level of February 2020 for the first time, the latest official figures show.

The Office for National Statistics estimated yesterday that UK GDP grew 0.9 per cent in November 2021, to be above its pre-coronavirus pandemic level by 0.7%. Services sector output increased 0.7%, with production rising 1% and construction growing 3.5%.

The EY ITEM Club think-tank said it expects GDP to have “fallen modestly” in December amid the rapid spread of the Omicron coronavirus variant.

However, it added: “With Omicron rapidly moving through the population, the economic impact is likely to be short-lived. Activity should rebound strongly as infection numbers fall, with GDP rising convincingly above pre-Omicron levels in early spring.”

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CBI lead economist Alpesh Paleja said: “While it’s good that economic growth picked up in November, the data has been overtaken by events. Activity is very likely to have taken a hit in December, as the spread of the Omicron variant and subsequent restrictions disrupted operations in certain sectors.

“As we kick off the new year, the near-term outlook is also clouded by additional challenges: shortages of labour – exacerbated by sickness absence, supply-chain disruption and a cost of living crunch for households."

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He added: "Implementing Plan B in December was the right thing to do, but with Covid clearly here to stay, the Government must now act to prevent the need for further restrictions on activity. This includes providing clearer forward guidance to support business adaptation, prioritising mass-testing over mass self-isolation, and ensuring that travel controls are proportionate so that the UK remains open to the rest of the world.”

Ed Monk, associate director at fund manager Fidelity International, said: “The economy has now reached the milestone of having recovered all the ground lost due to Covid-19."

He added: "There may still be a sting left in the 2021 numbers. The December estimate due next month will cover the Christmas period when many people imposed an unofficial lockdown on their activity in the run-up to family gatherings.

“With the economy now largely free of restrictions, the challenge now is to move beyond the recovery phase and overcome longer-term challenges, and in particular the headwind of the rising cost of living. Inflation will put pressure on households for many months with wage rises currently lagging behind, and tax and potentially further interest-rates rises on the way.”