The UK is on the verge of its biggest economic boom since the aftermath of World War II, according to Barclays boss Jes Staley.
His bullish valuation came as Barclays revealed that its profits for the first three months of this year had more than doubled from a year earlier to £ 2.4 billion.
“We believe the UK economy will grow at its fastest pace since 1948. It’s pretty spectacular,” he said.
The immunization program and the accumulated savings will help stimulate the rebound.
Mr Staley said the combination of the successful vaccine rollout and Barclays’ estimate of an additional £ 200bn in customer and business bank accounts meant the UK would join the US in knowing the fastest growing economy in decades.
The increase in Barclays’ latest profits was driven almost entirely by a more confident view of the number of its loans repaid.
Around the same time last year, the bank set aside more than £ 2 billion to cover the risks that borrowers might not be able to repay all their debts. This time around they are setting aside just £ 55million.
Interestingly, Barclays – unlike other big banks in the UK and US – decided not to adjust previous estimates of bad loan forecasts, but hinted that they would do so in the future. .
It will also be interesting to see how much of their total £ 9billion prize pool for estimated future debt defaults that they are willing to reconsider.
Assuming that the worst of future faults is sometimes referred to as “stuffing the cookie jar” – a jar that can be attacked when needed to increase future income. All banks do this to a greater or lesser degree,
But Mr Staley appears convinced that despite virus-related disasters in developing economies such as India and new lockdowns in developed countries such as Japan, the overall situation appears to be improving.
He also admits that many industries (such as hospitality and recreation) have faced desperately difficult circumstances and it is unclear how many of the five million workers still on leave can expect to return to work. full-time.
Many business owners won’t recognize the upbeat picture he paints for the UK’s economic future.
It is probably wrong to talk about an economic boom after experiencing the biggest economic downturn in 300 years, but Mr. Staley is in tune with his American counterparts when he hopes and expects that for himself and his many business clients. , the worst is behind us.