THE economy grew by a record 7.5% last year new figures reveal as the country bounced back from the pandemic.
The spread of Omicron over the festive period meant there was a contraction in December of 0.2% – but that was less severe than experts has expected.
It's the fastest yearly growth since records began in 1948, but follows the biggest ever slump of 9.4% in 2020 when the coronavirus pandemic first hit.
The Office for National Statistics (ONS) measures gross domestic product (GDP) monthly and it shows if the economy is growing or not.
Economic growth took a hit during the coronavirus pandemic but has steadily recovered after lockdowns were lifted.
The government announced this week that all pandemic restrictions will lift completely by February 24, including self-isolation or Covid passes.
The ONS said that GDP in December was in line with February 2020, before Covid-19 struck.
On a quarterly basis, GDP is still 0.4% below pre-coronavirus levels last seen at the end of 2019.
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Darren Morgan, director of economic statistics at the ONS, said: "GDP fell back slightly in December as the Omicron wave hit, with retail and hospitality seeing the biggest impacts.
"However, these were partially offset by increases in the Test and Trace service and vaccination programmes.
"Despite December's setback, GDP grew robustly across the fourth quarter as a whole with the NHS, couriers and employment agencies all helping to support the economy."
But millions of households face a cost of living crisis and experts predict that inflation will hit 7% in April.
Inflation has hit a 30-year high of 5.4% and figures due next week are expected to show that it will be even higher.
Martin Beck, economist at EY ITEM Club, said: "While the downside risks from Omicron have receded, the recovery now faces the more conventional economic challenge of high inflation.
"Consumers are facing the biggest squeeze on spending power in more than a decade."
Chancellor Rishi Sunak said: "The economy has been remarkably resilient; with the UK seeing the fastest growth in the G7 last year.
"I'm proud of the resolve the whole country has demonstrated, and proud of our incredible vaccine programme which has allowed the economy to stay open."
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