UK economy to ‘recover rapidly’ this year as vaccines are rolled out, Bank of England says
According to predictions made by the Bank of England, the economy of the UK could return to pre-pandemic levels by early next year as a result of the easing of restrictions facilitated by the rolling out of vaccines.
Growth Will Be Stronger Than Previously Thought
The economy shrunk 10 per cent last year, performing better than the Bank of England had predicted in November.
Nevertheless, people may have to brace up for tough weeks ahead as output is expected to nosedive again in response to lockdown measures. However, mass vaccination is expected to encourage economic rebound as life edges closer to the normal we once knew.
According to the projections of The Bank, that will enable shoppers to spend more, boosting the economy and facilitating its return to pre-pandemic levels by the end of this year or early next year, which is a bit earlier than it estimated when the country was plunged into a national lockdown three months ago.
In its latest inflation report, The Bank said: "COVID-19 continues to hit spending, incomes and jobs in the UK. It has put a big strain on UK businesses’ cash flow, and is threatening the livelihoods of many people."
Vaccination Drive Expected To Lead To Recovery
However, The Bank also noted that: "GDP is projected to recover rapidly towards pre-Covid levels over 2021, as the vaccination programme is assumed to lead to an easing of Covid-related restrictions and people’s health concerns".
National Health statistics reveal that one in five adults in the UK have so far received at least a single jab, including over half of those most vulnerable to the virus.
While the Bank hinted that the vaccine rollout was a reason to be optimistic, it warned that unemployment is expected to increase as government financial support is withdrawn. Prices are also expected to increase drastically as a VAT cut comes to an end and rising energy costs filter through the economy.