Corona jabs turbocharge UK economy
As Goldman hails ‘striking’ recovery from slump...
BRITAIN will be the fastest growing major economy in the developed world this year as the country bounces back from the Covid recession, according to Goldman Sachs.
In an upbeat report that will be welcomed on Downing Street, the banking giant said the UK would grow by ‘a striking’ 7.8pc in 2021.
That would be the fastest rate of growth of the post-war era and see Britain leave the United States and the eurozone in its tracks.
Goldman’s UK forecasts for this year are far stronger than the 5.3pc growth expected by the International Monetary Fund and 4pc pencilled in by the Office for Budget Responsibility.
The bank noted the successful rollout of Covid vaccines, with more than half the British population now having received at least one jab.
The rollout has been extended to 44-year- olds this week and those aged 40 to 43 are expected to be invited to book a vaccine later this week. There are hopes that people in their 30s will be included soon after that.
Goldman economist Sven Jari Stehn said: ‘The UK economy is rebounding sharply from the Covid crisis. Covid case growth has remained low and the vaccine rollout has surged ahead, with half of the population vaccinated. We therefore see the Government’s reopening plans as on track. Our 2021 forecast is now at a striking 7.8pc for 2021, above our expectations for the US.’
The US has long been expected to lead the recovery among the G7 nations as President Biden’s £1.4 trillion rescue package turbocharges the economy.
But the outlook in the UK has improved dramatically in recent weeks following a 9.8pc slump in output last year – far worse than the 3.5pc decline in the US and 6.8pc drop in the eurozone.
Bank of England chief economist Andy Haldane has predicted that Britain will bounce back like a ‘coiled spring’ once liberated from the shackles of lockdown.
Ian Stewart, chief economist at Deloitte, said: ‘High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.’
It is the latest batch of figures that will delight Prime Minster Boris Johnson and his Chancellor Rishi Sunak ( pictured).
A report by research group IHS Markit last week said the private sector is on course to record its fastest pace of growth for more than seven years this month. Figures from the Office for National Statistics suggested the recovery got under way in March as shoppers splashed out in preparation for the lifting of restrictions on April 12.
The ONS said retail sales rose 5.4pc last month amid strong demand for new clothes as well as plants and flowers for the garden. And a survey by the CBI found confidence among British manufacturers at its highest level since 1973. Companies have reported booming sales since restrictions were eased on April 12 to allow non- essential shops as well as beer gardens to reopen and outdoor dining to resume. Brewer Shepherd Neame said some of its pubs clocked up record sales in the week they reopened – even though they could only serve food and drink outside. Primark enjoyed its best ever week , prompting finance chief John Bason to declare: ‘Fashion is back.’