This page provides commentary and charts on the latest changes in the UK economy, using novel and rapid data sources as well as official statistics.
We explain the reasons behind each change as much as possible, although it can be difficult to separate the impacts of different things such as Brexit and COVID-19.
For an overview of our main economic indicators, visit our dashboard.
Latest headlines20 January 2022
- UK average house prices increased by 10% over the year to November 2021
- Price of food pushes up inflation
This page was last updated at 09:30 on 20 January 2022.
Fall in monthly turnover highest since April 2020
20 January 2022
The net proportion of businesses reporting a fall in monthly turnover was at its highest since April 2020, as reported in December 2021.
A net 6% of firms reported decreasing turnover compared with the previous month according to data from HM Revenue and Customs (HMRC) VAT returns.
|Total||Agriculture, forestry and fishing||Production||Construction||Services|
Download this table In December 2021, a net 6% of firms reported decreasing turnover compared with the previous month.xls .csv
This is part of a new indicators from HMRC data, VAT flash estimate diffusion indices. This complements the existing VAT diffusion indices, but our new flash indicator only uses monthly VAT returns received up to the seventh day (day seven) after the end of the reporting month, which are typically returns submitted in the first five working days after the reporting month.
Our new flash estimates will be published three weeks earlier and are therefore the fastest indicator of economic output that the Office for National Statistics (ONS) produces. Turnover diffusion indices are an aggregate measure used to track whether most firms are reporting an increase or decrease in turnover in their VAT returns.
UK average house prices increased by 10% over the year to November 2021
19 January 2022
The UK’s average house price increased by 10.0% over the year to November 2021, up from 9.8% in the year to October 2021. The average UK house price was £271,000 in November, which is £25,000 higher than the same month in 2020.
The temporary changes to Stamp Duty, Land and Buildings Transaction Tax, and Land Transaction Tax may have allowed sellers to request higher prices as buyers’ overall costs are reduced. As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.
This effect was then further exaggerated in June 2021, in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. Following a decrease in July 2021, average house prices increased in the months of August and September 2021, reaching a record level in September 2021 (when the last of the tax holidays came to an end in England). Despite a slight fall in the month of October 2021, average house prices in November 2021 of £271,000 are now just below this record level (£272,000).
Private rental prices paid by tenants in the UK rose by 1.8% in the 12 months to December 2021, up from 1.7% in the 12 months to November 2021. The beginning of 2021 saw a slight slowdown in rental price growth, which was driven by prices in London.
London’s rental price growth in December 2021 (negative 0.1%) remains the lowest of any of the English regions. This may reflect a decrease in demand, such as remote working shifting housing preferences, meaning workers no longer need to be close to their offices. It may also reflect an increase in supply, such as an excess supply of rental properties as short-term lets change to long-term lets.
Price of food pushes up inflation
19 January 2022
Consumer prices rose by 4.8% in the 12 months to December 2021, according to the lead measure of the Consumer Prices Index including owner occupiers’ housing costs (CPIH). This is up from 4.6% in the year to November 2021.
Annual inflation rates at this time are influenced by the effects of coronavirus (COVID-19) in 2020. Our blog post, Beware Base Effects, describes how price movements for some items during that period influence current inflation rates.
The Consumer Prices Index (CPI) also rose to 5.4% in December 2021 from 5.1% in November 2021. A wide range of prices contributed to the rise in the 12-month inflation rate, with the largest upward contribution to the change in the 12-month rate coming from food and non-alcoholic beverages, with eight of the nine food groups providing an upwards contribution.
The number of payrolled employees continued to increase in December 2021
18 January 2022
The number of payrolled employees continued to increase in December 2021, with a rise of 184,000 people (0.6%) compared with the previous month. There were 29.5 million payrolled employees in December 2021, an increase of 409,000 since February 2020. Payrolled employment is above pre-coronavirus (COVID-19) pandemic levels in all English regions, Scotland, Wales, and Northern Ireland.
In the period September to November 2021, the employment rate increased by 0.2 percentage points on the quarter (June to August 2021) to 75.5%. This was partially driven by the rise in number of part-time workers, which has been increasing since April to June 2021. The unemployment rate decreased by 0.4 percentage points on the quarter to 4.1%, while the inactivity rate increased by 0.2 percentage points to 21.3%.
In October to December 2021, the number of job vacancies continued to rise to a new record of 1,247,000, with most industry sectors showing record highs. However, the rate of growth in vacancies continued to slow down.
Annual growth in average total pay (including bonuses) was 4.2%, and regular pay (excluding bonuses) was 3.8% in September to November 2021. In real terms (adjusted for inflation), total and regular pay have shown minimal growth in September to November 2021, at 0.4% for total pay and 0.0% for regular pay.
Single-month growth in real average weekly earnings in November 2021 fell on the year for the first time since July 2020, at negative 0.9% for total pay and negative 1.0% for regular pay. Base and compositional effects have driven previous months’ growth rates upward. These effects are no longer present in the latest growth rates, however a small amount of base effect for certain sectors may still be present.
The UK economy was larger than its pre-coronavirus pandemic level for the first time in November 2021
14 January 2022
Gross domestic product (GDP) is estimated to have grown by 0.9% in November 2021 and is above its pre-coronavirus (COVID-19) pandemic level (February 2020) for the first time, by 0.7%.
Services (0.7%), production (1.0%) and construction (3.5%) output all increased between October and November 2021; this means that services and construction output are both 1.3% above their pre-coronavirus pandemic levels while production remains 2.6% below.
At the services sub-sector level, 8 of the 14 have surpassed their pre-coronavirus pandemic levels, with the largest contributions from human health and social work activities, wholesale and retail trade, and arts, entertainment and recreation.
Production output increased by 1.0% in November 2021, with a mixed performance across the four sectors. Manufacturing was the largest contributor to production growth in November 2021, increasing by 1.1%.
Construction output increased by 3.5% in November 2021, following a fall of 1.7% in October 2021 (revised from a 1.8% fall). This is the largest monthly rise seen in construction output growth since March 2021 (4.5%).
The increase in monthly construction output in November 2021 was driven solely by an increase in new work (5.7%), while repair and maintenance saw a slight decline, decreasing by 0.2%.
Gap between imports from non-EU and EU countries reaches its widest point of 2021
14 January 2022
Imports from non-EU countries were higher than from EU countries for the 11th consecutive month in November 2021. The gap was £3.8 billion, the widest recorded in 2021. Imports of fuels continue to be the main driver, despite decreasing this month over October 2021.
Total imports of goods, excluding precious metals, increased by £2.0 billion (4.9%) in November 2021, because of a £0.8 billion (4.5%) rise in EU imports and a £1.1 billion (5.2%) increase in imports from non-EU countries.
Total exports of goods, excluding precious metals, decreased by £0.3 billion (1.0%) in November 2021, driven entirely by a £0.3 billion (2.1%) fall in exports to non-EU countries while exports to EU countries remained flat. Contrary to imports, exports to non-EU and EU are closely balanced, with exports to EU being greater by £0.1 billion.
The total trade in goods and services deficit, excluding precious metals, widened by £2.8 billion to £9.3 billion in the three months to November 2021. This is because of a decrease in the trade in goods balance (excluding precious metals), which was only partially offset by an increase in the trade in services surplus.