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UK’s GDP to grow at the fastest rate since the Second World War

UK’s GDP to grow at the fastest rate since the Second World War

The UK economy is reportedly anticipated to witness the fastest growth rate since World War II in 2021, according to the EY Item Club’s Spring Forecast.

With lockdown measures being eased in Britain, businesses in the country have adapted better to pandemic restrictions and consumer expenditure booms. Households and businesses are getting ready for looser controls in the spring, as per the forecast.

The EY Club said that it upgraded its growth forecasts for this year after 2021 reported a stronger start than expected, with the rapid pace of vaccination in the country, which will allow a prompt return to a situation of comparative normality.

The forecast indicates that the GDP in 2021 is expected to grow by 6.8%, notably higher from its 5% growth rate estimations earlier in January, which would be the fastest annual growth rate in the country’s national income after 1941.

The UK economy reported a 9.8% decline in GDP last year. The latest forecasts claim that the positive near-term outlook could mean that the national economy could reach its pre-pandemic peak by the second half of 2022.

The economic predicted growth will be fueled by the boom in consumer spending due to rising savings during the lockdown by wealthier households.

The Deloitte Consumer Tracker notes that every measure of confidence has increased over the lockdown period, right from the economic situation to general public wellbeing and personal debt levels.

Ian Stewart, Chief Economist, Deloitte, was reported saying that the UK is set to see a sharp recovery in consumer activity. Stewart added that high saving levels, successful vaccine rollout, and the relaxation of the lockdown will contribute to a surge in spending during the coming months.

Furthermore, Stewart also noted that the peak in unemployment rate will be far lower than expected. According to the EY Item Club, the peak of unemployment would be lower than previously expected with the continuation of furlough support and start of hiring activities with the easing of lockdown measures.

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for, spanning the verticals of business, finance, and technology.