United Kingdom 2021-2022 outlook: brighter outlook thanks to the vaccine rollout
- Summary of our scenario
- Health situation and the latest economic trends
- The basis of our scenario
- After Brexit, focus on the Scottish independence risk
We have revised upwards 2021 growth (to 5.6% from 4.5% previously) thanks to stronger-than-expected GDP at the turn of the year and faster-than-expected vaccination rollout. The easing of public health restrictions in line with the Government’s 22 February Roadmap should permit a rebound in consumption and output from Q2. We expect the easing plan to proceed as planned and do not factor in another Covid wave, which could trigger a renewed lockdown later in the year.
Risks to the recovery seem more balanced than before but still biased to the downside. To the upside, there is a risk that households resume normal spending behavior earlier than expected and might decide to run down a greater proportion of their accumulated savings. To the downside, risks from Covid-19 remain substantial: delays in the vaccination programs globally, emergence of vaccine-resistant variants of the virus and a possibility of further periods of restrictions on economic activity.Slavena NAZAROVA, Economist