Analysis conducted by the EY Item Club has stated that the UK economy may not return to pre lockdown levels until 2024. The economic forecasters, who use comparable economic models to the Treasury have suggested that unemployment could rise up to 9% from the pre Covid level of 3.9%.
In addition to this they also estimate the economy will contract by 11.5% this year. This is a revision of the 8% contraction they predicted only one month ago. The reasoning given for this is that consumers have been more cautious than expected coupled with low levels of business investment.
However, the Item Club has said that this is an early economic forecast as useful data has only just become available. Mark Gregory who is the UK’s chief economist at the EY Item Club has said : “Unsurprisingly, without hard data, a wide range of views on the performance and outlook for the UK economy emerged.
Only last week the Bank of England’s chief economist Andy Haldane said that the UK economy had “clawed back” about half the fall in output it saw during the peak of the coronavirus lockdown from March and April.
Howard Archer who is the chief economic adviser to the EY Item Club has said: “We believe that consumer confidence is one of three key factors likely to weigh on the UK economy over the rest of the year, alongside the impact of rising unemployment and low levels of business investment. The UK economy may be past its low point, but it is looking increasingly likely that the climb back is going to be a lot longer than expected”.
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Current Affairs Correspondent | My name is Oliver Down I am 22, and a staunch brexiteer. I am a Bristolian lad who studied politics in Leicester. I believe in free speech and accurate journalism and I won’t be afraid to give you “the other side” of the story!
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