SHOT IN THE ARM FOR BRITAIN PLC!
● Rapid rollout of vaccine will help fire up economy ● Lockdown Britons ready to splash £125bn stashed away ● Hope of better times ahead for businesses
THE economy will start roaring back to life this year as the fast vaccine rollout fuels consumer confidence, says the Bank of England’s boss.
Andrew Bailey says Britain will “recover rapidly” from the end of March and rebound to pre-Covid levels by early 2022.
The upbeat forecast will boost Chancellor Rishi Sunak’s Budget next month – as he faces pressure for tax rises to fund the huge UK coronavirus bill.
The positive economic side effect of the mass-jab programme could give Mr Sunak more leeway to protect Brits from paying more.
And the bounce-back may prove stronger because stay-at-home households have stashed at least £125billion more in savings than normal.
It will be a massive shot in the arm for shops and firms that have suffered a catastrophic 12 months since Covid first struck. Mr
Sunak will reveal his plans to help the UK’s virus-battered economy with a Budget on March 3 as the end of lockdown approaches.
He will be under pressure to set out how he will protect jobs after nearly a year of restrictions. Business leaders are demanding he extend the furlough scheme into the summer as unemployment surges.
Calling the vaccination progress “excellent”, Mr Bailey said economic output would surge as restrictions are eased through spring.
And in a further boost the Bank of England hiked its prediction for economic growth next year from 6.25 per cent to 7.25 per cent.
Mr Bailey said: “The vaccine programme is excellent news and we do think that is going to support a sustained recovery for the rest of the year, beginning at the end of March.”
Mike Cherry, national chairman of the Federation of Small Businesses, said the success of the vaccine rollout would give small businesses hope for better times ahead. The hugely positive economic news comes as the latest figures showed that nearly 11 million people – one in five of all adults – have now had a coronavirus jab.
Ministers are insisting the UK is “getting safer every day” and of the 10,992,444 shots administered, 10,490,487 were first doses. That is a rise of 469,016 on the previous day’s figures. Some 501,957 were second doses, an increase of 2,995 on official figures released the previous day.
Health Secretary Matt Hancock said the UK remained on track to complete the vaccination of those considered in the top four Covid priority groups in the next 10 days.
He said: “We are on track to deliver the commitment we have made of offering the jab to all of the top four priority groups by February 15.
“I’m just so proud of the team who are delivering this, it’s going really, really well.”
Mr Hancock added: “You saw yesterday 10 million jabs done. Today we passed the threshold of one in five of the population who have been jabbed already.”
In the House of Commons, vaccines minister Nadhim Zahawi told MPs: “Our nation is getting safer every day. We have now vaccinated almost nine in 10 over-80s in the UK, almost nine in 10 over-75s, and over half of people in their 70s.
“We’ve also visited every eligible care home possible with older residents in England and have offered vaccinations to all their residents
and staff. This means we are currently on track to meet our target of offering a vaccine to the four most vulnerable groups by mid-February.”
Prime Minister Boris Johnson tweeted yesterday: “One in five adults in the UK has now received a first dose of the vaccine.
“Every jab gets us closer to defeating the virus, so please come forward when you are called by the NHS.”
Mr Johnson has signalled he will start easing lockdown from March 8 with the reopening of schools. He will reveal the country’s route out of restrictions on February 22, which could pave the way for workers to return to offices.
Mr Cherry said: “What we now need to see is a comprehensive Government road map outlining how we get back to something resembling normality through a combination of vaccines, a functioning test and trace system and the right business support.”
But he warned: “Gaps in the help available to firms remain. Directors, the newly selfemployed and those in supply chains are still left out almost entirely.
“Business rates reliefs, bounce-back loan grace periods and the job retention scheme are all set to end in the next few months. We urgently need to see these windows extended.” The Bank of England’s quarterly monetary policy report notes the recovery in spending could be stronger if consumers who have built up savings during lockdowns spend more.
Current projections say they will burn through only five per cent of their cash stash.
Figures suggest that from March to November last year, households stashed over £125billion more than normal – and they will have accumulated even more since then.The Bank said: “The current environment is clearly highly unusual historically. There are reasons to think households may choose to spend more of their recently accumulated savings.”
Experts believe households with retired people who have received theit jabs sooner will be the first to splash the cash.
Bolstered by the vaccine news, many people are already booking summer holidays and wariness of public transport will boost the demand for used cars.
Millions, however, are still furloughed and redundancies rose sharply at the end of last year. Unemployment is expected to peak at 7.75 per cent this year.
The Bank’s Monetary Policy Committee held interest rates at a record low of 0.1 per cent but warns they could fall below zero in the future.
Forecasts made alongside the rates decision also show the Bank believes the UK will narrowly avoid a double-dip recession.
Howard Archer of the EY Item Club said the Bank kept rates on hold as it “chose to look to the brighter longer-term prospects for the economy which will stem from the progressive rollout of the Covid-19 vaccines”.
DOCTORS, nurses and other NHS heroes, who have spent desperate months fighting to save lives, will need our support as they try to come to terms with the horrors they have witnessed.
An intensive care consultant told us the experience has been worse than dealing with a terrorist attack. Most major incidents are over within 24 hours but the latest wave of Covid-19 has only just peaked and thousands are fighting for their lives.
There are deep concerns about the exhaustion, trauma and mental health challenges many health workers now face. They deserve our gratitude and respect, but they also need our solidarity, understanding and help as they tackle the legacy of the pandemic.