UK Economy to Grow by 4% in 2021, Treasury Chief Says
By Jason Douglas and Paul Hannon
LONDON--The U.K. economy is expected to make up ground lost to
the coronavirus pandemic by the middle of next year, as a rapid
vaccination program fuels economic recovery.
Forecasts from the Office of Budget Responsibility, the U.K.'s
fiscal watchdog, show the economy is expected to reach its
pre-pandemic size by mid 2022, Treasury chief Rishi Sunak said
Wednesday. That is six months sooner than the OBR forecast in
That forecast reflects expectations the U.K. economy will
recover quickly later this year as a rapid vaccine rollout allows
the government to row back restrictions on daily life and the
Britain has so far administered at least one dose of vaccine to
more than 30% of its population, and plans to offer vaccination to
its entire adult population by the end of July. The U.S. has so far
vaccinated around one-fifth of its citizens. The European Union has
given shots to 7.5% of its population.
Still, the economy is expected to shrink in the first months of
the year after the government imposed a new lockdown in January to
stem the spread of a highly-transmissible new variant of the virus
first detected in Britain in November. The variant has since spread
around the world.
Mr. Sunak said the scars of the pandemic will linger for years,
as he laid out his latest tax and spending plans to law makers
Wednesday. The OBR expects the U.K. economy will be around 3%
smaller in five years time than it would have been had the pandemic
"The damage coronavirus has done to our economy has been acute,"
Mr. Sunak said. He added that "once we are on the way to recovery,
we will need to begin fixing the public finances."
Write to Jason Douglas at email@example.com and Paul Hannon
(END) Dow Jones Newswires
March 03, 2021 08:15 ET (13:15 GMT)
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