Bank of England: expert analyzes the outlook for the UK economy
“Our plan works,” Rishi Sunak declared. The chancellor said the unemployment rate is likely to be half what it originally feared after last year’s pandemic. He told MPs that Treasury’s help to workers and businesses while easing the lockdown was helping the recovery. “While our recovery will be long and difficult, our plan is definitely working,” Sunak said in a discussion to the House of Commons on the Queen’s speech.
The chancellor’s positive judgment came after figures showed production (gross domestic product) rose 2.1 percent in March. Overall, during the first three months of the year, the economy contracted by 1.5 percent due to the winter lockdown.
But the contraction was well below the 3.8% decline the Office of Budget Responsibility had forecast.
The Bank of England said it expects the economy to recover quickly with increased spending as businesses reopen, and to grow by 7.25 per cent this year.
Economists are expecting a wave of summer spending, and the government roadmap to exit from lockdown is due to expire on June 21.
“Both companies and the government will feel this data represents a turning point for the UK economy,” said Anna Poatta, head of macroeconomic research at Euler Hermes.
The chancellor said unemployment is probably half of what he feared (photo 🙂
“There is hope that this will be the start of a long, hot summer for UK companies.”
As optimism mounted, a prominent economist said faster-than-expected economic growth could help the chancellor avoid tax increases.
“We should see a very strong recovery in consumer spending,” said Andrew Goodwin, chief UK economist at Oxford Economics, in an article in the Daily Express.
According to the bank’s forecast, the economy is expected to reach pre-epidemic levels this year.
Lower unemployment could cause less damage than expected: “This will give the advisor more options. It should mean that there is no need for more tax increases.
Anna Boatta said the data marked a turning point for the UK economy (Image: Droit et Croissance)
Mr. Sonak visited the Pillars Brewery in Walthamstow, East London yesterday to see staff preparing to reopen the in-house hospitality next Monday, and was greeted by Gavin Leighton and Omar Razak, co-founders.
“It is wonderful to see companies like Pillars, which were supported by the government during the pandemic, recover as the economy begins to recover,” said Sunak. A company spokesperson said it would have been helpful to tell the consultant “about the challenges our business faced and how we found the reopening.”
“It has been a great pleasure for us to welcome our employees after they return from their license. We are also recruiting new team members through the government Kickstart plan.
In the House of Commons debate, Mr. Sunak said that presidents “are now starting to feel more secure, too.
While many companies have been hit hard by the pandemic, the most recent data shows that the number of companies that actually went bankrupt last year compared to the previous year fell by about a quarter.
“When the licensing scheme expires in September, we will have helped pay people’s salaries for a year and a half, and support the jobs of nearly nine million people at their peak.”
The economy is expected to reach pre-epidemic levels this year (photo:.)
“We have protected the incomes of more than 2.7 million self-employed workers, and we have supported companies to keep people working for tens of billions of pounds in the form of loans, grants and tax cuts, and we support the most vulnerable. During the crisis with an enhanced safety net, increased funding for local authorities,” the consultant continued. And public services and aid for the charitable sector.
At the start of this crisis, unemployment was expected to reach 12 percent or more. It is now expected to peak around half of this level.
“This means that nearly two million people are losing their jobs less than previously feared, and our current unemployment rate is one of the lowest in the G7, which is lower than Italy, France, Canada and the United States.”
Sunak warned that a full recovery from the effects of the epidemic will go a long way.
“It will take a long time for this country and the whole world to fully recover from the shock that caused the largest production drop in 300 years. But while our recovery will be long and difficult, our plan is clearly working now.
The chancellor warned that a full recovery from the effects of the epidemic will go a long way (photo: …)
But we will never hold back: 800,000 people have lost their jobs because of this crisis and no advisor can guarantee that no more jobs will be lost. People who lose their jobs burden me even more.
Rachel Reeves, recently appointed Shadow Adviser after a Labor reshuffle, responded, “This is not the time for the background cracks, but we must match the magnitude of the moment our people and planet are grappling with.
“We must put an end to the insecurity and lack of opportunity in our economy for the many.”
Previously, Sunak welcomed data showing the economy’s recovery in March.
“Despite a difficult start to this year, economic growth in March is a promising sign for things to come,” he said.
“ Our employment plan is working: After the comprehensive package we have put in place, the number of unemployed is expected to be around 2 million less than initially expected, and the UK economy is in a strong position for rapid growth as we exit the pandemic.
“Even with this positive news, we know that many companies and individuals still need our help.
“That is why I want to assure everyone today that our recruitment plan will continue to create, support and protect jobs in the coming months.
“We have extended our freelance business and licensing plans until September, while plans like Kickstart are already helping to create thousands of new jobs for young people.
“As we cautiously reopen the economy, I will continue to take all necessary steps to support our recovery.”