UK economy set to grow at fastest rate in more than 70 years

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The UK economy will enjoy its strongest growth in more than 70 years in 2021 as Covid-19 lockdown restrictions are lifted, according to the Bank of England.

The economy is expected to expand by 7.25% this year, with extra government cash for workers and businesses helping to limit job losses.

This would be the strongest growth since official records began in 1949.

Bank policymakers also held interest rates at a record low of 0.1%.

The Bank expects the recovery to gather pace as the reopening of high streets paves the way for a mini-spending boom.

The UK's rapid vaccine rollout is expected to support consumer confidence, with the economy expected to get back to its pre-pandemic size before the end of the year.

Fewer job losses

Chancellor Rishi Sunak announced in the March Budget that the furlough scheme, which subsidises employees' wages, would be extended until the end of September.

The Bank now expects the unemployment rate to peak at 5.5% later this year. This is far below the 7.75% it predicted in February.

It expects "most employees" to return to work as the economy starts to reopen.

The number of people on furlough is expected to fall to 2.75 million in the three months to June, from just under five million at the start of this year.

"Given the expected near‑term recovery in activity, unemployment is projected to increase only slightly," policymakers said in the Bank's latest Monetary Policy Report.

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May 06, 2021 at 11:45PM
By Szu Ping Chan
https://www.bbc.co.uk/news/business-57008220