UK Economy To Regain Pre-Pandemic Size Earlier Than Forecast

  • Britain's economy will regain its pre-pandemic size in the middle of 2022, six months earlier than previously forecasted, finance minister Rishi Sunak said on Wednesday, while announcing an extension of emergency aid to get it through its lockdown.
  • The economy will remain 3% smaller in five years' time than it would have been without the damage wrought by the coronavirus crisis and extra support is needed now as the country remains under coronavirus restrictions, he said.
  • Among the new support measures was a five-month extension of his huge jobs rescue plan and more help for the self-employed, the continuation of an emergency increase in welfare payments, and an extension of a VAT cut for the hospitality sector.
  • Announcing forecasts by the Office for Budgetary Responsibility (OBR), Sunak said the economy was likely to grow by 4% in 2021, slower than a forecast of 5.5% made in November.
  • Looking further ahead, the OBR forecast gross domestic product would grow 7.3%, 1.7%, and 1.6% in 2022, 2023, and 2024 respectively. In November, the OBR had forecast growth in those years of 6.6%, 2.3%, and 1.7%.

(Source: Reuters)