ECONOMISTS have upgraded the UK’s growth forecasts on the back of positive indications for a successful coronavirus vaccine.
The hope is that Pfizer’s vaccine will mean that lockdown restrictions can be lifted, ending the massive strain on UK businesses.
The hospitality, entertainment and arts sectors have been particularly hard hit, with many businesses forced to furlough staff, make redundancies or even shut up shop.
UK’s small business owners have also been under significant pressure, with lots of people left ineligible for any government help.
But it’s not all doom and gloom, as forecasters are now predicting that GDP could bounce back to pre-pandemic levels as soon as the middle of next year.
Douglas McWilliams, deputy chairman at the Centre for Economics and Business Research told the Sun: “The vaccine is a game changer… I think there is a reasonable chance we’ll get back roughly to where we were before at the end of 2019 by the middle of 2021.”
The CEBR says that there are three key reasons why the vaccine could make such a big impact on the UK’s economic fortunes.
The first is that it means future lockdowns are extremely unlikely once the current one is over.
McWilliams said: “Social distancing measures may continue for a period, but the spread of the vaccine will mean than medical means rather than social and economic means can be used to control the virus.”
The second factor is that a vaccine is likely to lift people’s moods, meaning a happier Christmas than previously expected.
The third critical factor, according to the CEBR, is that the travel, tourism and hospitality could bounce back quite quickly meaning a boost for the economy.
This is likely to be bolstered by the fact that Brits have managed to do some serious saving during the pandemic so far,
McWilliams said: “A lot of restaurateurs seem to think they are going to be fully booked in December now and the bookings for ski holidays have shot up.
“The other thing is that people have built up quite a lot of savings during lockdown. In the early days of the crisis we saved nearly 20 billion on top of what we might normally do because we couldn’t go out to spend.
“People have money in their pockets, so if they want to spend… I think we could see consumer spending running quite strongly through the first part of next year.”
