The early reopening of the activity enabled by the vaccination is expected to boost the UK economy in 2021 beyond expectations. Above all, growth is expected to remain at a high level in 2022.
In one of its latest publications of economic forecasts published at the end of the week, Crédit Agricole’s economic studies department forecasts stronger growth in the United Kingdom for 2021 than anticipated a few months earlier.
Thanks to the rapid roll-out of immunization and a further extension of the government’s short-term budget support policy, UK gross domestic product (GDP) growth is expected to be around 5.6% in 2021 through instead of the 4.5% expected at the start of the year.
And above all, despite the worst fall in GDP in 2020 (-9.9%) since the Second World War, economic activity in the United Kingdom is expected to return to its pre-pandemic level from the first quarter of 2022, while so far most scenarios have only anticipated it for the end of the year.
But many are forecasting even stronger growth, such as Andrew Goodwin, chief economist at Oxford Economics, who cited in the Financial Times a few days ago envisages a GDP growth of 7.2% in 2021. For its part, the consulting firm EY has updated its growth forecasts to 6.8% in 2021, against 5% predicted in January. He too sees the British economy return to its level of the fourth quarter of 2019 as early as the second quarter of 2022, three months earlier than expected.
Sustained growth in 2022
The extension of the government program to maintain jobs until the fall also gave rise to unanimously more optimistic unemployment prospects, now forecast at 5.9% in 2021, against 7.4% expected in September.
By way of comparison, the latest projections from the Banque de France anticipate a maintenance of the unemployment rate in France at around 9% by the forecast horizon of the Monetary Institute (2023). GDP growth, almost as strong in 2021 as in the UK at 5.5%, thanks to a strong rebound in consumption expected in the third quarter, is expected to slow to 4% in 2022.
The International Monetary Fund (IMF), which raised its global economic forecasts at the beginning of April, confirms, for the United Kingdom, the maintenance in 2022 of a growth rate above 5% and the average of the so-called “economies”. advances ”(+ 3.4%). This high level of activity in 2022 should nevertheless remain below the + 5.6% expected in China (after + 8.4% in 2021), the only large economy to have remained growing in 2020.