UK Economy to Feel the Strain From Coronavirus Till 2023
Arslan Butt • 1 min read
The latest forecast by EY Item Club expects the UK to take up to three years to experience complete economic recovery following the damage from the ongoing coronavirus pandemic. The effect of the crisis, which has already caused a significant impact on economic growth and employment levels, could last at least until 2023 on UK’s economy.
Consumer spending, especially, is expected to reduce by at least 50% through this year, as consumers put off or cancel planned purchases in the wake of the pandemic. Consumer demand could also rebound by the second half of the year as economic activity restarts across the country, even as travel restrictions also ease.
According to economists at EY Item Club, UK’s economy could contract by 6.8% in 2020 before rebounding into positive territory and growing by 4.5% in 2021. Meanwhile, Q2 GDP could contract by 13% as a result of the strict lockdown measures enforced by the government.
These estimates were based on the assumption that the lockdown will begin to be eased by early May, at least partially, with more restrictions being lifted by June. Economists are also hopeful that the government’s several efforts help support businesses and prevent unemployment levels from rising too high in the wake of the crisis.