After the pandemic led to a catastrophic plunge in GDP in 2020, the UK is set to be one of the fastest economies in the West to once again be firing o all cylinders. In 2020 Britain saw its economic output drop by 9.8 percent.
The huge downfall was the worst performance of any action in the G7.
Critics of Boris Johnson blamed his Government’s response to the pandemic for the country suffering its worst economic performance since the 1709 Great Frost.
However, it is thanks to ministers’ response to the Covid crisis the UK is now set to recovery so quickly.
The success of the vaccine rollout and easing of lockdown rules means forecasters the EY Item Club now expect GDP to grow by 7.6 percent in 2021.
They predict the economy could recover to its pre-pandemic size by the end of this year.
The growth would be the fastest annual rise since World War Two.
Last time the UK saw such high levels of increase in GDP was in 1941.
EY’s analysts said: “With the lifting of COVID-19 restrictions across the country, and the vaccine roll-out continuing to progress, the growth prospects of the UK economy have improved beyond previous predictions.
“The economy is now expected to return to its pre-pandemic peak by the end of 2021 – two quarters sooner than expected in April.”
The forecasters added: “Now that people are returning to working, shopping and socialising, the UK is well-placed to achieve a strong bounce-back in growth.
“With the economy shrinking so much compared to most other advanced economies, it means there’s more lost ground to make up.
“UK consumers are particularly big spenders on consumer services, which should magnify the economic boost from life returning to normal.”
The predicted growth is still based on the Prime Minister’s hope that his roadmap out of lockdown will be “irreversible”.
Any reintroduction of restrictions could see the speed of the UK’s Covid recovery slow.
Britain’s recovery is in contrast to forecasts for the EU.
The eurozone is not expected to return to pre-pandemic levels until next year according to the European Central Bank (ECB)
Countries on the continent struggled with a slow start to their vaccination programmes, coupled with the importation of new coronavirus variants from abroad.
Last week, ECB President Christine Lagarde said the eurozone should return to its former heights in the first three months of 2022.
“The euro area economy is rebounding strongly.
“But the outlook continues to depend on the course of the pandemic and progress with vaccinations,” she told a press conference.
“We expect economic activity to return to its pre-crisis level in the first quarter of next year.
“But there is still a long way to go before the damage to the economy caused by the pandemic is offset.
“The number of people in job retention schemes has been declining but remains high.
“Overall, there are still 3.3 million fewer people employed than before the pandemic, especially among the younger and lower-skilled.”