Corona jabs turbocharge UK business: Goldman Sachs says Britain will be the fastest growing major economy in the developed world this year
Britain will be the fastest growing major economy in the developed world this year as the country bounces back from the Covid recession, according to Goldman Sachs.
In an upbeat report that will be welcomed on Downing Street, the banking giant said the UK would grow by ‘a striking’ 7.8 per cent in 2021.
That would be the fastest rate of growth of the post-war era and see Britain leave the United States and the eurozone in its tracks.
Bouncing back: In an upbeat report that will be welcomed on Downing Street, banking giant Goldman Sachs said the UK economy would grow by ‘a striking’ 7.8 per cent in 2021
Goldman’s UK forecasts for this year are far stronger than the 5.3 per cent growth expected by the International Monetary Fund and 4 per cent pencilled in by the Office for Budget Responsibility.
The bank noted the successful rollout of Covid vaccines, with more than half the British population now having received at least one jab.
The rollout has been extended to 44-year-olds this week and those aged 40 to 43 are expected to be invited to book a vaccine later this week. There are hopes that people in their 30s will be included soon after that.
Goldman’s forecasts are sure to delight Prime Minster Boris Johnson and his Chancellor Rishi Sunak (pictured)
Goldman economist Sven Jari Stehn said: ‘The UK economy is rebounding sharply from the Covid crisis.
Covid case growth has remained low and the vaccine rollout has surged ahead, with half of the population vaccinated.
We therefore see the Government’s reopening plans as on track. Our 2021 forecast is now at a striking 7.8 per cent for 2021, above our expectations for the US.’
The US has long been expected to lead the recovery among the G7 nations as President Biden’s £1.4 trillion rescue package turbocharges the economy.
But the outlook in the UK has improved dramatically in recent weeks following a 9.8 per cent slump in output last year – far worse than the 3.5 per cent decline in the US and 6.8 per cent drop in the eurozone.
Bank of England chief economist Andy Haldane has predicted that Britain will bounce back like a ‘coiled spring’ once liberated from the shackles of lockdown.
Ian Stewart, chief economist at Deloitte, said: ‘High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.’
Goldman’s UK forecasts for this year are far stronger than the 5.3 per cent growth expected by the International Monetary Fund and 4 per cent from the Office for Budget Responsibility
It is the latest batch of figures that will delight Prime Minster Boris Johnson and his Chancellor Rishi Sunak.
A report by research group IHS Markit last week said the private sector is on course to record its fastest pace of growth for more than seven years this month.
Figures from the Office for National Statistics suggested the recovery got under way in March as shoppers splashed out in preparation for the lifting of restrictions on April 12.
The ONS said retail sales rose 5.4 per cent last month amid strong demand for new clothes as well as plants and flowers for the garden. And a survey by the CBI found confidence among British manufacturers at its highest level since 1973.
Companies have reported booming sales since restrictions were eased on April 12 to allow non-essential shops as well as beer gardens to reopen and outdoor dining to resume.
Brewer Shepherd Neame said some of its pubs clocked up record sales in the week they reopened – even though they could only serve food and drink outside.
Primark enjoyed its best ever week, prompting finance chief John Bason to declare: ‘Fashion is back.’