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Daily Mirror
Daily Mirror
Business
Levi Winchester

UK economy forecast to bounce back at fastest yearly rate since WWII after Covid crisis

The UK economy is predicted to bounce back and grow at its fastest rate since World War 2, according to new forecasts.

It comes after the nation suffered its biggest annual decline for three centuries last year due to the coronavirus crisis.

EY ITEM Club now predicts gross domestic product (GDP) will expand by 6.8% this year, which would be its quickest rate of growth since 1941 - or 80 years.

This is up from the 5% figure it had originally projected, with expectations being accelerated due to the vaccines programme.

In a separate forecast, Goldman Sachs has backed stronger growth of 7.8% for this year - better than its predictions for the US.

Pubs and restaurants have started to reopen for outdoor service (NurPhoto/PA Images)

Other forecasts from the International Monetary Fund, Bank of England and Office for Budget Responsibility range from 4% to 5.3% growth.

It isn’t surprising that the UK economy will expand this year, with businesses having spent months at a time closed in 2020 thanks to Covid-19 restrictions.

The tough measures saw GDP plunge by 9.8% over the course of the 12 months from January to December last year - the worst in modern records and wiping out seven years of economic growth.

The UK also plunged into its "worst ever" recession in 2020 as businesses continued to be shut down by the pandemic.

GDP was first measured in the aftermath of the Second World War.

But before this, the worst yearly fall was estimated to have been 13% in 1709 due to the Great Frost.

This was followed by a 9.7% drop in 1921 thanks to coal strikes, unemployment and the depression that followed the First World War.

The roadmap out of lockdown has already seen pubs, restaurants, hairdressers and non-essential shops reopening in England on April 12.

But any growth will ride on the lockdown restrictions continuing to ease and the vaccines programme staying on schedule.

Latest GDP figures show the economy rebounded slightly by 0.4% in February from January's fall of 2.2%.

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