UK economy growth prospects continue to accelerate!
According to the EY ITEM Club’s Spring Forecast the UK’s economic growth prospects for 2021 have been significantly upgraded – with growth now predicted at 6.8% this year, compared with a forecast of 5.0% in January. This prediction clearly reflects the underlying strength of the economy and, in particular, just how well it has done during the latest Covid-19 related ‘lockdown’. Given the continuing, very successful vaccination programme, which has certainly helped growth prospects, confidence and optimism for the future appears to have been well and truly boosted by this latest forecast. For the fuller picture regarding EY’s latest prediction please read the bulletin below which was issued today by Insider Media.
Roger Mundy, Managing Director, Beardsley Theobalds, 26th April 2021
UK economy’s growth prospects upgraded - EY
The UK economy is set to grow at a faster rate than previous expected according to a report from EY.
The UK's economic growth prospects for 2021 have been significantly upgraded in the EY ITEM Club's Spring Forecast, with growth of 6.8 per cent expected this year, rather than the 5 per cent growth predicted in January.
The improved near-term outlook means the UK economy is expected to regain its pre-Covid-19 peak in the second quarter of 2022 – a further improvement from January's forecast of the third quarter of 2022, and the 2023 and 2024 dates predicted previously.
The upgraded forecast primarily reflects the UK economy's resilient performance in the lockdown-affected fourth quarter of 2020 and first quarter of 2021, providing a better-than-expected platform for growth through the rest of this year.
The substantial near-term fiscal support for the economy announced in the Chancellor's Budget, the roadmap towards economic reopening, and the continued rapid roll-out of Covid-19 vaccines have also helped to improve growth prospects.
Howard Archer, chief economic adviser to the EY ITEM Club, said: "The UK economy has proven to be more resilient than seemed possible at the outset of the pandemic. Businesses and consumers have been innovative and flexible in adjusting to Covid-19 restrictions and, while restrictions have caused disruption, lessons learned over the last 12 months have helped minimise the economic impact."Our latest forecast suggests that the UK economy will emerge from the pandemic with much less long-term 'scarring' than was originally envisaged and looks set for a strong recovery over the rest of the year and beyond. There will be some issues to look out for though, not least inflationary risks which will grow as the recovery gains pace and monetary policy remains accommodating. Interest rates aren't likely to rise until late 2022 or early 2023 at the earliest."