The UK economy is set to rebound strongly from the economic shock of Covid-19, according to the EY ITEM Club.
EY have hiked their forecasts for growth in 2021 to a positively sizzling 6.8%, up from 5% forecast in January. They predict a solid recovery this year, as lockdown restrictions are eased and the rollout of Covid-19 vaccines continues.
That means the UK economy is expected to return to its pre-pandemic size in the second quarter of next year – three months earlier than before – and suffer less long-term economic ‘scarring’.
Howard Archer, chief economic advisor to the EY ITEM Club, says 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.
“In another boost, figures from Deloitte show that consumers are also more upbeat, raising hopes for a jump in spending this spring and summer as the economy unlocks.”