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The UK economic growth is expected to return to the pre-COVID-19 levels within two years, courtesy of the big-spending splurge announced by the Finance Minister Rishi Sunak, the latest Reuters poll of economists showed.

Key findings

“Twenty-two of 31 economists who answered an additional question in the March 5-10 poll said GDP would be at its pre-COVID-19 size within two years, including five who said within a year. The other nine said it would take longer.”

“When asked at what level the unemployment would peak, the median response was 6.5%, most likely in the final quarter of this year after the retention scheme ends.”

“When asked about UK fiscal policy over the next couple of years an overwhelming majority, 21 of 25, of economists said Sunak had got it about right. Three said it was too tight and the only one said too loose.”

“For 2021 as a whole the growth forecast was revised down to 4.6% from 4.7% while the 2022 median was revised up to 5.7% from 5.5%.”

“Median forecasts showed borrowing costs would not rise until sometime in 2023, and even then only to 0.25%. None of the 67 economists polled expected any change at the Bank’s next decision on March 18.”