UK 2021 growth prospects brighten

The UK economy will grow by 6.8% in 2021 according to the EY ITEM Club's spring forecast, up from 5% as projected in their winter forecast.

According to the economic forecasting group, the higher rate of growth is partly because the economy held up better in Q4 2020 and the Q1 2021 contraction was less than expected, despite lockdown being in place for much of the period.

GDP grew by 1.3% in Q4 2020 rather than showing flat performance as previously predicted, giving the economy a head start on the race to recovery.

It also credited the more optimistic projection to Chancellor Rishi Sunak's fiscal support announced in the March Budget, the vaccination programme and the Government's roadmap.

The group predicts the economy will return to its Q4 2019 performance in Q2 2022, six months earlier than previously estimated.

It says GDP will grow a further 5% in 2022, suggesting "businesses can start to plan for the possibility of two years of strong economic performance".

Get in touch to talk about your business.